Tag Archives: Bank Nifty

Market Trade Setup 15th February 2019 #Nifty

A tough week is coming to an end with a very sad news coming from pulwama where 44 of our brave soldiers were martyred in a suicide attack of terrorists from across the border. India has promised a befitting reply at a place and time of its choosing. This brings a lot of uncertainty into the market which will be worried about the kind of reaction and its consequences. Globally also things are not looking good where growth fears are back again and Dow Jones lost 100 plus points last night. Asian markets are in red with Hong Kong down 400 points, Japan down 250 points, Shanghai and Korea in mild red and only Taiwan in flat to green. Brent crude is also a cause of worry which is now at 65 dollars which in a week gained 4 dollars. 

Domestically, Yes bank was a star performer yesterday with a largest ever intraday gain for itself of 31%. Imagine a stock going up 31% on a single day, that’s what one clean chit from RBI can do. Another positive we can look forward to is the Jet Airways restructuring plan. Finally a restructuring plan seems to have worked out where the majority of 51% of stake in Jet will be held by the promotors and Naresh Goyal whose stake is 51.5% now is like to come down to 25% and Etihad which has 24% stake is likely to come down to 12%. Q3 results seem to be mixed with Nestle disappointing again, for Nestle which follows calendar year its Q4 results. Pharma company Glenmark was a relief which reported 11% rise in sales while MTNL, Jet Airways, Voltas were a disappointment. 

On the derivatives front, yesterday was Nifty weekly expiry and there was so much selling yesterday even in the monthly series that the long positions which were at 55% came down to 49% by evening. This is something which is very rare. Contrary the Put call ratio went up to 1.35 from 1.29 on the back of short put positions that got created. The first weekly expiry on Nifty and Bank Nifty clocked 15.89 lakh Crore turnover which is almost equal to the monthly expiries. So, the expectations that volumes will go up has actually come true. 10600 put added 3.8 lakh contracts and 10700 put added 3.5 lakh positions and 10700 put now has the highest open interest which means 10630-10650 is the support for this month. On the call side 10800 call added 8.2 lakh positions and 11000 call has the maximum open interest. 

What is the Nifty call for the day?

Today is Friday and the cues across the globe are not that good. Even the domestic situation is challenging with market worrying what kind of retaliatory action India will come up with in pulwama. Brent crude also is at 65 dollars and all that means we will open in 10740-10760 range and we need to see if 10750 holds or not. If 10720-10750 doesnt hold and Nifty slips below that before 12 then its a warning sign to stay off. I know that you have not traded for almost a week but these are testing times and we need to hold on and wait for the right opportunity. If by 3PM also Nifty manages to hold 10720-10750 then you can venture into taking a long position, but remember that a lot can happen over the weekend in Kashmir which will have an impact when we open again on Monday. So, its all looking very risky indeed.

Market Trade Setup 8th February 2019 #Nifty

Market Trade Setup 8th February 2019

Yesterday’s 25 basis point rate cut by RBI had triggered a short term rally that took Nifty to 11,120 mark but it couldn’t sustain. You wouldn’t have had any chance to take a position as Nifty was always close to 11,100 mark from the time it opened. So, no positions would’ve been taken yesterday. The USA markets were negative with Dow closing 220 points lower and NASDAQ nearly 100 points down. Today Asian markets are trading mixed with Japan and Hong Kong down 350 points each, while China and Singapore are trading in mild green. Brent crude has fallen below $62 and is trading at $61.4 now which is a positive sign for India.

Coming to domestics yesterday’s monetary policy has evoked mixed reactions where there was a 25 basis point rate cut bringing down the repo rate to 6.25% and MSF and Bank Rate to 6.5%. The inflation forecast was also lowered to under 3% for first half of 2019 and the tone of the policy was also changed to neutral from calibrated tightening. Though markets liked it initially, it couldn’t sustain as there were some growth concerns with services inflation still at 5.8%. So this 6.5% Bank Rate would effectively yield 70 basis points margin for banks which is much lower compared to 125 to 150 points margin kept during the Rajan’s time.

Coming to derivatives there was a mild buying seen in futures market where the overall long positions still stand at 52%. On the options side the Nifty put-call ratio has come down to 1.78 from 1.83 seen at the beginning of the day. On the put side 11,000 put added maximum open interest of 5.3 lakh positions followed by 11,200 put which added 4.2 lakh positions. From 10,700 the floor for the market has shifted to 11,000. 10,700 now has the second highest open interest. On the call side 11,400 call added 4.2 lakh positions and 11,500 call added 3.7 lakh positions. 11,000 call still has the open interest but there is a lot of open interest building at 11,400 and 11,200 which might emerge as the roof going forward.

What is the Nifty call for the Day?

Yesterday there was no chance to take any positions and today Nifty might open slightly gap down between 11,030 to 11,060. On the downside 10,980 is a big support and it might face resistance at 11,080 to 11,100. Today is the last day of the week and some profit booking is expected at any time. So, I would advise to stay out from Trading and look at the Nifty from a fresh point of view as we get into the second half of the series on Monday.

Market Trade Setup 4th February #Nifty

Market Setup 4th February

The February series had started on 1st Feb but little attention was paid on it as that was a big budget day and everyone was taken over by that big fundamental event. The budget came, the market liked it and we had a big rally of over 100 points for Nifty and it closed close to 10900 mark. Now the action is back on February series and if we look at the last four years February is negative in 3 out of the 4 years. 2015, 2016 and 2018 saw declines in February while only 2017 saw February month going up. Last year was very bad with an 800 point fall. There was always a post-budget sell-off seen and last year it was on the LTCG while this year it could be other factors.

If we look at the events this month, we have a lot of political events taking place and West Bengal already in a mini-crisis, many such events can be expected. Apart from that, the Q3 results will continue for another 10 days with many important companies like SBI coming up with numbers. We also have the first monetary policy of the new RBI Governor scheduled for 6th February, which will be closely watched by the market. Then we also have the IIP and CPI inflation data for December and January that comes will throw further light on how Q3 GDP is going to be. Then we have the Q3 GDP numbers coming on 28th of February that will be on the expiry day of February series. 

How is the February series placed?

February series has started on Friday with just 41% long positions on Nifty futures. But the positivity of the budget had led to a lot of buying on Nifty futures and now the overall long positions for Feb series is at 45%. These 45% positions are open positions on Nifty futures which were not closed. On the options side also, the series started a bit heavy with a lot of rollovers and the put-call ratio was 1.65 which eventually decreased to 1.63 by the end of the trade on Friday. The 10700 put has the highest open interest followed by 10400 and then 10500. On the call side 11000has the highest open interest followed by 11200. 

So, one view is Nifty will remain in a narrow range of 10700-11000 throughout this month and if 10700 is broken on downside then we can test the 10400-10500 range which is bearish and can happen if things go wrong politically. On the other hand 11000 is very strong resistance and a very positive political event if at all occurs can break this and in that case, Nifty might go to 11200. So, safely 10700-11000 is the range for this month with a 40% chance of Nifty doing down to 10400-10500 levels and 20% chance of Nifty breaking 11000 mark and going towards 11200 levels. Only political events can break this 10700 and 11000 mark on either sides

What is the Nifty call for the day?

On Friday, you had a profitable day and now we are starting the new week with new cues. A mixed Asian market means we will also open flat between 10870-10900 mark and we are going to see the resistance again at 10920-10940 zone and on the downside, support will come at 10850 levels and another at 10800-10820 levels. We are at the top end of the range and this is just a 300 point range so trading is tough. Wait for a fall and if Nifty falls to 10850 mark and takes support there then go long at 10850 with a 10900 as the target coming today, tomorrow or day after. If Nifty breaks 10820 and goes down, don’t take any positions and just wait for Nifty to find the base. If Nifty doesn’t go to 10850 then also, don’t trade. So, today’s trade opportunity is very specific and it comes only when Nifty goes to 10850 mark and finds support there and doesn’t fall below 10820.

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Market Trade Setup 30th January #NIFTY

Market Trade Setup 30th January

Penultimate day for the expiry, and what a day we had yesterday! There was a time when nifty broken 10600 and that gave shivers to bulls but then there was a dramatic recovery in the latter half of the day and we had conquered 10650 and just closed above that. This is one positive signal for bulls going into the expiry. Global markets were almost flat with Dow gaining just about 50 points but NASDAQ lost 70 points. The Asian markets are trading in the mixed terrain today with Korea and Singapore in positive while Japan, Hong Kong and China in slightly negative territory. Brent Crude again climbed to 61 dollars, trading at 61.3 dollars per barrel.

On the domestic front, there is a lot of politics playing around with Rahul Gandhi coming up with a minimum guarantee scheme for the poor. That would approximately work out to 650 rupees per month per family and that would cost 2 lakh Crore for the Govt. BJP fired the Ram temple salvo by requesting SC to handover the undisputed 67-acre land to Ram Janmabhoomi trust. Amidst all this, there was a positive cheer on Q3 results, with Bank of Baroda and HDFC coming up with a very good set of numbers. This is a huge relief. Today’s Q3 results include Bajaj Auto, BEL, Castrol India, Heritage foods, ICICI Bank, Indian Oil Corporation, Jubilant food works, LIC housing finance, NTPC, Tata communications and Torrent Pharma.

On the derivatives front, the put-call ratio of Nifty remained more or less intact at 1.21 vs 1.23 at the beginning of the day and there was the unwinding of positions that was seen both on the call side as well as the put side. The index options saw 6.55 lakh crore turnover and that took the total F&O turnover yesterday to 8.55 lakh Crore and we are looking at a 10 lakh crore turnover today. 10650 put added 2.9 lakh positions while 10800 put saw 6.3 lakh contracts unwinding. On the call side, 10600 call added 4.3 lakh contracts while 10700 call added 4.2 lakh contracts. 10500 put still has the highest open interest, close behind are 10600 and 10700 put. Today will be an interesting day where we will see where we could see some decisive open interest build up. On the call side, 11000 call is firmly placed at the roof.
What is the Nifty call for the day?

Two days running you were not doing anything and I will surely give you some options strategies to work with once the markets open and premiums settle down. Watch out for my calls on Twitter. Coming to futures trading, there could be a flat open for Nifty between 10640-10670 zone and 10720-10750 can be the destination today. On the downside, 10580-10600 will be strong support. There is a 30 point additional premium on Feb futures and I suggest you to take a long position on February futures as January expires tomorrow and you would be taking a huge risk if you play with Jan series. Enter a long between 10620-10650 spot and keep a target of 10720-10750 on spot prices. That would give you a profit of 60-80 points. 

Market Trade Setup 22nd January India #Nifty

Market Trade Setup 22nd January 2019

Look at the way Nifty is crawling for last few days! A week ago Nifty was around 10800 and in last 5 to 7 trading sessions step by step, slowly Nifty crawled its way to 10950 mark. In the process it has slowly overcome first the 10820-10850 resistance and then 10920 resistance. Both took a lot of effort and now its closed above 10950. So, what will happen now? Will Nifty now touch 11,000 and go on from there? Will there be a post-budget rally that will take Nifty to 11500-11800 levels just before we kick off the 2019 elections? All this look more speculative and far fetched but for now, there are some immediate fears that we have to deal with.

The first issue to deal with is UK Prime Minister Theresa May comes out with her Plan B and says that there wont be any other referendum on the Brexit. The other news is the IMF coming up with the global GDP forecast for 2019 which is expected to be at 3.5% vs 3.7% seen in 2018. So, a slowdown is indicated globally which is always a worrying point. The Chinese GDP data has already confirmed that. Most of the Asian markets today are in the red on this report and the Crude is also trading in 62 dollar mark for last 2 days and now we are seeing the petrol prices going up again. After reaching the lowest rate in 15 months of 72.44 rupees, Petrol price in Hyderabad is now at 75.61.

On the derivatives front, yesterday’s rapid 50 plus point move the premium has more than halved from 20 points to 8 points. Last time when such a thing happened, next day market corrected almost 80 points. Are we going to see a similar correction today? The options data is not giving a clear picture and options traders are still figuring out where Nifty might go. The put-call ratio went up marginally from 1.56 to 1.59. 10900 put added 6.3 lakh contracts while 11000 put also added 5.4 lakh contracts. 10700 has the highest open interest and the gap between 10500 and 10700 put gradually increasing. On call side, 11000 call still has the highest open interest. 

What is the Nifty call for the day?

Yesterday I asked you to take a position between 10900-10920 with a target of 10980 and yesterday Nifty went up to 10987. So, you would have made a 60-80 point profit minimum. Today is not as lucky as yesterday. A red Asia means we will open bit flat around 10930-10950 levels and what happens after that needs to be seen. Watch out carefully, if Nifty is weak, stay away. If 10900 is broken then stay away from the trade. If you have still been holding positions of yesterday then exit as soon as the market shows growth. No fresh trades today.

Market Trade Setup 21st January #NIFTY

Market Setup 21st January

Start of the 4th week of a 5-week long expiry and we have started off on a different note. The highest open interest on the put side which was 10500 from the day we started this series has changed now to 10700. That means Nifty can’t fall below 10700 and that is a positive sign. On the other hand very bad news coming from China where the GDP for the Q4 of 2018 coming at 6.4% which is the lowest seen in last 28 years!! This is something unbelievable and the average GDP for 2018 comes at 6.6% where Q1 grew at 6.8%, Q2 at 6.7%, Q3 at 6.5% and Q4 at 6.4%. This is not unexpected and China is on the way down and when the news actually comes, it feels bad. The flipside is, the demand for metals and crude will come down as China is a manufacturing driven economy. The US, however, celebrated Friday with a 300 plus point gain in Dow Jones. 

On the domestic front, Q3 results are going fine after a bad start. HDFC and Wipro came out with their Q3 numbers on Saturday and both of them were very good. Though higher than expected slippages were reported for HDPC but the other parameters were as expected. Wipro also came out with in-line expectation with profits beating the margins. In other news, the budget is now coming into news as Finance minister indicated that it’s not going to be just a vote on account but an interim budget. Interim budget is a full-fledged budget presented for an interim period less than 1 year, here it is 4 months. So, Govt can announce lot of sops and that is keeping the markets excited. Farm waivers, tax holiday for 1 year for middle class income groups are all on discussion table. 

On the derivatives front, as told before 10700 put has the highest open interest now and that is because of 1.9 lakh positions getting unwound there. 10700 put added just a small open interest of 32,700 positions only and that’s how the action was on the put side. Even then the Nifty put-call ratio jumped from 1.52 to 1.56 by the time we closed the trade on Friday. On call side everywhere there is shedding of open interest. All this indicates that the market is bracing itself up for a different kind of trade in the next 9 sessions left for expiry. How it is going to play out we need to watch. 11000 on call side still continues to have highest open interest and none of the other strikes is closer to it. So, 11000 is going to be a great resistance to cross.

What is the Nifty call for the day?

China negative is India positive. So, expect a decent opening around 10920-10940 zone and that is also the resistance zone. If 10900 is held for the first one hour of trade then it is advised to go for a long trade only between 10900-10920 zone, whenever you get that opportunity. If that is not there, leave it but don’t get stuck. Take a small target of 40 points and exit before 10980 at any cost. These are tough risky trades to be attempted by risk takers only. For others, untill we cross and close above 10950 there is no trade to take.

Stock Market Trade Setup 4th January 2019 India #Nifty

Market Trade Setup 4th January 2019

The worries of Apple have consumed the NASDAQ which fell more than 3% on a single day and Apple tumbled more than 10% on a single day which is the worst performance since 2013. It lost on a single day the market cap equivalent to Infosys, TCS and HDFC. The fears that Apple cannot go any further from here has pushed US into searching who is the next Apple in NYSE. There was a time when Microsoft held that position now it’s going to be either Amazon or Netflix depending on how things move from here. Dow Jones is down more than 650 points and that send Asia on a downward spiral at the open. But after selling there is always a tendency to look beyond and that is triggering a buy, which brought almost all Asian markets except Japan into the flat territory. 

On the domestic front, the political scene has started to boil with election announcements just another 2 months away. Brent Crude is the news for us which went up to 55.7 dollars. Another major factor is the fiscal slippage that we might face and it could be as high as 1.5 times. The farm package is on the way and it could happen today or during the weekend. The rupee has crossed 70 again and this is something that is happening on the rising bond yields. All this is due to the fiscal management and till the time there is clarity on this, Rupee and bond markets will continue to be in pressure. 

On the derivatives front, yesterday was a very bad day for Nifty as it lost nearly 120 points. The F&O trade was worth 18.8 lakh crore yesterday out of which Index options accounted for 17.9 lakh crore. Index futures also had 2.97 lakh contracts most of it were short positions on Nifty. With this, the overall long positions came down to 48% at the end of the day from 50% seen at the beginning of the day. The Nifty put call ratio also fell to 1.34 in the evening from 1.47 seen at the beginning of the trade. The biggest factor to consider was a 11.1 lakh contracts disappearing from 10500 put and the open interest stands at 39.7 lakh and 10000 put added 4 lakh contracts and the open interest there stands at 32.2 lakh.

On the call side 11000 is consolidating itself as the strike with highest open interest and has 39.1 lakh contracts and yesterday itself it added 8.2 lakh contracts. 10900 call added 7.5 lakh and 10800 call added 6 lakh contracts. 11200 which was the highest open interest till yesterday is now 2nd with 32.2 lakh contracts. So, its 10500-11000 is what the range seems to be. If there is a decline in Nifty today the 10000 put will add more open interest an that would mean the downside will start opening up for 10000 also. On the call side, 10800 is building up as a call that can replace 11000 call too.

What is the Nifty call for the day?

Yesterday, I started you to stay out of the market and for a bull it worked perfectly. There would have been no way that you could have made profit yesterday. We will have a flat start today around 10670-10700 levels and on the downside 10620-10640 will offer as strong support. Nifty will really need a very bad fundamental to breach this level and on the upside 10780-10800 is the resistance with an intermediate resistance at 10750. So, my call for the day is if Nifty holds 10650 then it is better to initiate a long trade anywhere above 10650 to 10710 levels with 10750 to 10800 as the target. The ranges are very huge because the market itself is very volatile.

Market Trade Setup 21st December #Nifty

Market Trade Setup 21st December 

Winter Solstice day and today is the shortest day in the Northern hemisphere. Shortest and forgettable day as the cues across the world looks horrible. The news of the impending recession has spread so fast across the world that everyone today is waiting for the great depression to arrive. Just 3 months ago we were seeing crude almost touching 90 dollars on the back of increased demand and sharp growth that is seen for the world? What changed in this 3 months? China has started to slow down significantly and the US has not been growing the way it should despite so many rate hikes by the Fed. All this means 2020 will be the year of recession. 

The news of recession has sent the whole world into a deep red. All the European markets have crossed with losses ranging from 1.5 to 3% and the US has corrected 2% or 440 points yesterday and now the US is at its 17 month low. This is all driven by the talk of the impending recession and in last two days, Dow Jones has lost more than 900 points. Bank of Japan has kept the rates unchanged and are seeing their 10-year yields close to 0% and the deposit rates are at -0.1%. Japan is reacting very badly to US fall and its down more than 350 points now. Shanghai is also down by more than 1.5% and all this will surely put pressure on India today. 

On the domestic front, we have the PSU banking recapitalization that will infuse huge liquidity into the system. Now liquidity is picking up in the market and on top of that Brent and Rupee are acting favourably. Brent Crude is trading exactly at 55 dollars vs 56 dollars yesterday and Rupee saw a huge recovery yesterday to go below 70 per dollar and ended the day at 69.7 per dollar. This followed up by falling yield rates is all looking good for India. But with so much of global growth scare how far can India sustain and gain? 10000 put still has highest open interest now followed by 10500 put. On the call side, 11000 call still has the highest open interest followed by 11500 call. This is an interesting thing to see if the base moves from 10000-11000 to 10500-11500 in the last week of expiry.

What is the Nifty call for the day?

Yesterday’s call of staying away worked perfectly as we saw Nifty moving in a narrow range of 40 points not allowing any meaningful trade. Nifty just managed to close at 10950 and today again a gap down to 10900-10920 level is expected and that means the support of 10880-10900 will be immediately tested. If that doesn’t hold then it’s the 200dma of 10760 and 20dma of 10740 which will be strong support. A short trade also might not be possible in this kind of situation. Going long at lower levels also might not be a great strategy as global cues are looking bad. So, being a weekend, it’s better to stay out of the market today and watch what happens.

Market Trade Setup 20th December #NIFTY

Market Setup 20th December

The bull run from 10330 level seen on December 11th to 10960 levels in 9 days which is a 600 point rally looks like has halted. The reason is attributed to the Fed meeting which ended last night and Fed has gone and raised the interest rates by 25 bps. With this, the interest rates in the US goes up to 2.50% which is the highest in 11 years. The Fed rate which was just 0.25% in November 2015 has now gone to 2.5% in just 3 years. Fed also cut the future cuts from 3 to 2 and also have gone onto used the word “uncertainty” which was not liked by the markets. The Result made the US fell by more than 300 points and all the emerging markets are down with the worry that money will move from them back to the US as the interest rates in riskfree assets are increasing. Entire Asia is in red and so will be India when it opens.

Coming to domestics, the Fed rate hike will have its impact on the US as FIIs will pull out money from India and take it back to the US as interest rates are going up there. That is an inevitable macro that we have to deal with. Brent Crude also has stabilized and is trading at 56.5 dollars which is the same as yesterday so we won’t have that advantage also. The technicals hold the key today and we have the 100dma at 10930 and we will open below that. The 20day and 200 day moving averages are at 10730 and 10760 respectively and they might offer some support for a steep fall. But the bond-buying program of RBI and other OMO’s that it announced might keep the Nifty from falling majorly. The Rupee has recovered further yesterday to reach 70.40 and today we have to see what happens when dollars evaporate from Indian markets.

On the derivatives front, the futures are absolutely neutral with bullish and bearish positions taken alike. The Nifty long positions stand at 48% and the options markets the Nifty put-call ratio is at 1.66 from 1.59 and that is a positive sign. 10000 put still remains at the highest open interest at 47 lakh positions and 11000 call has the highest open interest at 38 lakh positions. Yesterday 11000 put added 5.9 lakh positions while 10900 put added 5.5 lakh positions and 11100 put added 3.1 lakh positions. On the call side, 11100 call added 2.7 lakh positions while 11200 call added 1.5 lakh positions. All this action indicates that traders are building for an upside expiry of 11000 mark while keeping the downside wide open. 

What is the Nifty call for the day? 

Yesterday I cautioned you from taking any trades and that has worked well. If you have closed your positions at 10950 or at 10970 mark you would have made a lot of profit of 100-140 points. Today will be a bad start with opening expected to happen below 10900 mark. From there the first support will come at 10850 mark and that should be held. If not then 10800 will be tested. Today is the day of uncertainty and taking a short position after a big gap down is not all a good idea. Long positions if taken at the gap down might also go into losses if market corrects. In such uncertainty condition it is better to stay away for today and see which way Nifty will go and finally where it ends.