Tag Archives: Bank Nifty

Market Trade Setup 9th August #Nifty

Markets and News

Another new all time high hit yesterday and the market is moving only higher, higher and higher. The US markets are also playing the ball and yesterday NASDAQ posted 7 session positive closing which is happening only second time this year. Dow Jones took a slight breather last night when it closed 50 points down. The best news is coming from the Crude oil front, where Crude it a 7 week low with brent crude falling below 72.5 dollars straight from 75 dollars. Asia is gravitating between mild red and mild green.

Domestic Cues

On the domestic front, the story of this month has been coming back of FIIs to the Indian markets. In May and June FIIs sod in cast market and July saw an almost flat action from FIIs. August however saw some positivity and they bought 1134 crore and that means money is coming back to India from FIIs. On the other news, HPCL and BPCL have reported weak numbers on the back of increasing Crude price and pressure on margins. NMDC is down but they look much better than expectations. In the pharma space Cipla has come up with a decent set of numbers.

Derivatives Action

On the derivatives front there has been a mixed action on the futures front and the Nifty long positions on futures remained constant at 58%. However the action on options front was different with a lot of demand getting created for options. The Nifty put call ratio rose to 1.77 from 1.67 and that is the big worry. 11300 put added 7.9 lakh contracts and 11400 put added 7.8 lakh contracts and 11500 put added 3.8 lakh contracts. On the call side 11700 call added 2.1 lakh contracts while in all the other strikes there was unwinding of positions.

What is the Nifty call for the day?

A flat Asia means we might open flat around 11450 and these all time high areas really dont have markers. Crude is positive but the internals are putting pressure on markets. If FIIs continue buying in cash market, it will make Nifty to go up, but this is an exhausted Nifty and 11480 is a zone where it might halt. On the down side 11400-11420 is a support zone and we need to see whether Nifty has the mojo to cross 11480 or not.

Market Trade Setup 17th July #Nifty

Markets and News

Yesterday I talked about Nifty put call ratio being at 1.79 and its very much over heated. From this level it has to come down and the only way it can happen is when call shorting happens. Call shorting is a mildly bearish strategy and that means a temporary fall in the Nifty. At hindsight anyone can talk about it, but I just fell short of predicting the market from that angle. If I had done that I would have seen markets going to 10920 not 10980. These are the misses that one has to live with, and we all mature on them.

Today the cues are mixed with Dow Jones closing flat but there was a 13% fall in Netflix as they reported lower than expected subscriber additions. Both domestic as well as international subscriptions came lower than expected. The point one needs to understand is, at the time when Google, Amazon, Facebook and Apple are coming up with fantastic additions, Netflix is not able to catch up. This is the big worry that market watchers are worried about. The good news however was the permission given to Iran even after its deadline of November, set as a part of sanctions to sell crude is slightly relaxed. The result is Brent Crude fell to 72 dollars.

Domestic Cues

On the domestic front, the WPI inflation comes at a 5 year high at 5.77% mainly on the food and the fuel prices. Vegetable prices are at 8% in June vs 2.5% in May and fuel inflation is 16% in June vs 11% in May. The number is not at all encouraging and now the case is very strong for RBI to hike the interest rates in its August policy. Meanwhile the Q1 results of HUL were almost as expected with 12% growth in volumes and 19.2% increase in profits. The profits were marginally below expectations and now some of the brokerages are feeling that HUL is plateauing out. But my personal view is, I want to wait a bit more before concluding anything.

Quarterly Earnings

Now Q1 season has picked up and the companies declaring their Q1 is going up. Here is some of them.

1. Ashok Leyland

2. CRISIL

3. Federal Bank

4. ICICI General Insurance

5. Muthoot Capital services

6. Rallis India

7. Sintex

8. Tata Sponge

9. Zee Entertainment

Derivatives Action

On the derivatives front, as mentioned earlier yesterday morning the Nifty put call ratio was at 1.79 which is overheated and by the end of the day it came down to 1.62. There was a massive unwinding of positions on the put side with 11000 put shedding 4.4 lakh positions, 10900 put 3.9 lakh positions, 10800 put 2.9 lakh positions. When 11000 put shed 4.4 lakh positions 11000 call added 6.3 lakh positions in the open interest and that brought down the put call ratio. 11100 call also added 5.9 lakh positions and the premium there fell by 60%.

What is the Nifty call for the day?

A flat to negative Asia means, we will also open around 10930 levels and the Crude will be the news that might push the markets up. Yesterday, you might have taken positions at 10980 levels and they might be in losses now. Wait patiently and the losses will be trimmed. 11020 is a temporary resistance and if you dont want to risk exit for a small 40 point profit whenever it is reached this week. Do not take any new positions and if you want to exit the market at 10980 which is no profit and no loss you can do that. Today Nifty will find support at 10880-10900 levels and can touch 10980 on the upper end.

Market Trade Setup 5th July #Nifty

Markets and News
I had told you yesterday that India might sing a different tune from Asia and that is what exactly happened. Nifty gained 70 points even when Asia was sulking at July 6th sanctions. That shows that China’s problem is not worrying India in any way. The US markets were shut yesterday and so no cues are available from there and today morning Asia is still worried about what will happen when US will impose sanctions on China. Shanghai, Hong Kong and Japan are all in mild red and we await how US will react tonight when their markets open.
Domestic Cues
On the domestics, US trade sanctions are a non-event for us, and what is important is the MSP rates that was announced by Govt yesterday. The rice MSP has gone up by a record 200 rupees per 100kg and there was a 50% hike in MSP’s of all other commodities. That would push inflation by at least 0.5% and that would mean the August credit policy might see another rate hike. Another cue to watch out is the drop in the Crude prices from over 78 dollars to 77.50 dollars and that might ease worries on rising crude. RIL’s AGM is scheduled today at 11am and we might expect some announcement from Mukesh Ambani which might move the market.
Derivatives Action
So, we have a bunch of fundamentals to look out for and the technicals will take a back seat a bit today. So, on the derivatives front, we have Nifty futures not matching to the rise in Nifty spot yesterday which shows that buying is really not happening on futures market. The nifty went up by 70 points but Nifty futures went up only by 55 points. That is a worry for people who actively took long positions on Nifty and kept it open today. The options market also saw puts being more in demand than call. The Nifty put call ratio is at 1.53 at the close from 1.50 at the open. 10700 put added 4.2 lakh positions while 10800 put added 2.8 lakh positions. On the call side only 10900 call added 1 lakh positions.
What is the Nifty call for the day?
When many technical gurus were advocating short positions, I advised long on Nifty at 10680 yesterday with 10750-10780 as the target and that target was achieved yesterday. You would have pocketed the profit. Today is a different day. Nifty will open flat to positive and 10780 is a resistance to watch out for. If RIL AGM goes well we might even see a 10820 today and at higher levels there is a pressure and selling might bring Nifty back to 10750 to 10720 levels. So, wait for the right moment to re-enter and I will tweet the timing and till then, wait and watch!!

Market Trade Setup 4th July #Nifty

Markets and News

As we approach mid week the blues are back on the market again. One step backward and two steps forward seem to be the order of the day. US has ended lower as the date of trade sanctions against China is approaching. 6th July is when US is imposing 34 billion dollar worth trade sanctions and China said it will also retaliate. US wont trade today as it is their Independence Day and that is the main reason why US dropped to pre-empt the trade tariff deadline. Asia is also a bit worried with the approaching deadline and most of the Asian markets are in red.

Domestic Cues

On the domestics, India is slightly different from Hong Kong, China or Japan when it comes to trade sanctions and so, their worries are not necessarily our worries. We have a different set of worries to take care of. The top one in that list is Crude price which has crossed 78 dollars and that might start to push the prices up. For last 9 days the prices of Petrol have remained stagnant at 80.03 at Hyderabad. Good news is that dollar index has come down a bit and that might keep the rupee in 68 zone which is definitely a good news.

Derivatives Action

On the derivatives front, there was a rapid increase in the long positions and the overall long positions now stand at 40% again and the Nifty premium also has gone up from 0.5 points at the beginning of the day to 12 points. The options data also showed bullishness with Nifty put call ratio touching 1.50 from 1.45 because of the positions that were built on put side as Nifty crossed 10700. 10600 and 10700 put both added 4 lakh positions each and 10600 is again getting established as the strong support.

What is Nifty strategy for the day?

Today might be a day when India could sing a different tune than rest of Asia. The opening again will be around 10680-10700 zone which is the 50dma and if Nifty holds this level, without slipping below 10650 then we can see a push towards 10750-10780 zones. That push can be taken advantage of by taking a long position on a dip towards 10700 with 10750-10780 as the target. Do not consider a long if Nifty struggles between 10650-10700

Market Trade Setup 12th June #Nifty

Markets and News
The day the whole world is waiting for finally arrives. Trump and Kim are meeting in Singapore. The handshakes are good but one needs to look beyond them. Trump is all over Kim and Kim is looking bit intimidated. Trump may claim a victory or if Kim irritates him midway might snap out and dismiss the talks as useless. That volatility is always is a possibility, that makes the Asian markets to trade flat. Everyone is nervous on what is going on between them. The meeting will end in sometime and by the time you read this the meeting would have got over and Trump might have come and said any of the two things above.
On his part Kim is an inferior partner and a poor nation which depends on aid from China and other communist regimes and the survival of North Korea is mostly on black mailing its neighbors like South Korea and Japan and if Kim loses that, how will he and his country survive? Will he give up communism and embrace a liberal economy? On his part he might start threatening everyone again if things don’t go his way. But how seriously his threats would be taken also needs to be seen. So this appears advantage Trump as of now, but we can’t under estimate the wily East Asian mind of Kim.
Domestic Cues
On the domestic front, the only big fundamentals are the IIP and CPI data coming at the end of the day today. The CPI data is important because if May inflation touches 5% or crosses 5% then we have a real danger of RBI rushing with another rate hike in their August policy which will be not taken positively by the market as of now. The Crude is remaining steady at 76 dollars and that is keeping petrol prices under control as of now. So, the big fundamental that will move the market today is going to be the Trump-Kim meet.
Derivatives Action
On the derivatives front, the action firmly shifted to puts yesterday as the market conquered 10800 level and went up-to 10850 before correcting from there. Lot of puts were sold and lot of calls were unwinded. 10800 which was taken as the roof for this series is no longer safe. The Nifty put call ratio is now at 1.54 from the 1.49 level seen yesterday morning. 10700 put saw 6.4 lakh contracts got created and 10800 had the maximum contracts at 7.2 lakh fresh contracts. In terms of accumulated open interest 10600 put still continues to have an accumulated open interest of 49.5 lakh contracts. At 50 rupees premium 10550 is the decided floor for the market. 11000 call has the accumulated open interest of 39.3 lakh contracts and that means 11020 is possible in this series but at 30.5 lakh accumulated open interest 10800 level with 98 point premium might offer a big resistance around 10850-10880 zone.
What is the Nifty and bank Nifty call for the day?
Your bank Nifty position taken at 26450-26500 level almost reached its target of 26700 when it reached 26650 and receded from there. Hold onto that position and see if that level is reached before you make the profit and exit.
Nifty will open absolutely flat under the 10800 level on the Trump-Kim summit but since the open is at 9.15am and if Trump makes a statement that can turn the tables. So, its very difficult to predict at what level we open. Its going to be a volatile session if noises comes out of Singapore but if everything goes well, market will go up. We need to see if 10850 resistance will be taken out or not. On the downside 10680-10720 is the strong support zone and stay at the sidelines today and see what happens before jumping into taking any positions

Market Trade Setup 8th June #Nifty

Markets and News
Yesterday was a huge rally and the targets given in bank nifty have been met and nifty gave you 50-55 point gain from 10750-10760 level where you would have entered. If you have exited then you have a great opportunity to re-enter, else you will have to wait for some more time. The US markets last night were fine with Dow gaining almost a 100 points, but looks like that bullishness is limited to only US. Asia did not carry it forward and every market in Asia is in red today with Hong Kong losing over 300 points. India will also get impacted by this.
Domestic Cues
On the domestics, there are few international cues that will affect the market today the primary being the G7 meeting where the most developed nations will meet and make announcements that will have some impact on emerging markets including India. Second is Brent Crude which is at 77.3 dollars now and that might put an end to a 10 day fall in Petrol prices which have corrected almost a rupee during this period. That might affect the sentiment of the market. Today it would be mostly the technicals that would support the market in the absence in any meaningful fundamentals. 10930 on 15th May is the top and 10565 which is the 50dma is the strong support.
Derivatives Action
On the derivatives front, there was some more buying that has happened on the Nifty futures and the overall long positions now stand at 45% and with shorts still more than 50% it could mean that there is always a chance of correction. The options market also showed lot of bullishness yesterday and the Nifty put call ratio surged to 1.49 from 1.40 and that is due to huge surge in put positions. 10700 put added a whopping 10.1 lakh contracts yesterday and 10800 put added 7 lakh positions. 10600 put still continues to have the maximum accumulated open interest of 43.2 lakh contracts and still 10560 should be a strong support for this series and this coincides with the 50dma of Nifty.
What is the Nifty and bank Nifty call for the day?
Ups and downs are the part of the game and one needs to keep that in mind. If you have not exited the position taken yesterday you might have to take it to next week. If you have exited it after a 50 point gain above 10810 then you have another chance to enter into the market. Today, weakness in Asia means India also will open in red probably around 10710-10730 levels. If Nifty remains there without breaking 10680-10700 mark then it is better to take another long position around 10710 with 10800 as the target sometime next week. Ups and down are part of the market and one needs to have to stomach to take it, so its a risk you are taking.
Its a weekend and Bank Nifty will be volatile and its better to wait and watch rather than taking any positions there. Avoid Bank Nifty for today.

Market Trade Setup 29th May #Nifty

Markets and News
After catching the direction of the market right and after your bank nifty targets met, today is another day. We are just 2 days away from the expiry day and that means some degree of volatility returning on the market. US markets were shut yesterday on account of memorial day and so no cues available from US. All Asian markets are trading in red today and there is no specific reason is attributed. It could be possibly due to absence of cues from US and the increasing dollar index putting pressure on other currencies.
Domestic Cues
On domestics, there are few fundamentals that could play a role. Crude has settled at 75 dollars and that is still a good news. Monsoon is expected to hit the Kerala coast in the next 3-4 hours and if that happens during market hours it will surely push up the sentiment. The only not so good fundamental is the decision of Govt to borrow more to sponsor the 1.5 times MSP that is promised and that is going to put some pressure on the bond market and that means the sentiment on bonds might be slightly negative and we might not see that much rally on the bank nifty that we saw yesterday.
On the Q4 results count, L&T declared a fantastic set of numbers and that the guidance is also positive as the company is expecting a lot of orders coming its way. All this will add to the positive sentiment.
The Q4 season is almost done and here are the few leftover companies that are coming with their Q4 results today.
1. Apollo Hospitals
2. BEL
3. BHEL
4. BPCL
5. Coal India
6. Everady Batteries
7. Glenmark pharma
8. Green ply
9. Indian overseas bank
10. Max Retail
11. Thomas Cook
Derivatives Action
On the derivatives front, the focus now has shifted on the options market and the Nifty put call ratio again crossed 1.5 mark and ended at 1.53. This series highest was 1.63 and we are slowly moving towards that. 10650 put assed 10.2 lakh open interest while 10600 put added 9.6 lakh open interest. 10700 put also added 7.1 lakh open interest. So 10580 is the strong floor with 106200 emerging as a very strong support. On the call side 10750 call added 6.6 lakh open interest indicating 10770 as the resistance. Far away 10900 call added 4 lakh positions indicating 10900 as a strong resistance.
What is the Nifty and Bank Nifty call for the day?
Yesterday, Bank nifty met its target and today, I advise caution on it and don’t take any positions there. Just observe the movement of bank nifty. On the Nifty front however, a weak Asia means we will have a mildly red open around 10650 and what happens from there needs to be seen. 10620 is a very strong support and if Nifty is in 10620-10650 range, take a long positions with 10700-10710 as the target for both the positions. 10720 is looking a bit tough, just exit above 10700 if 10720 is looking tough.

Stock Market Trade Setup 28th May 2018 #Nifty

Markets and News
The last week of May series starts on a positive note. There was a flat to negative close on Friday in US market and Dow lost 58 points. But that will not be a trigger today but what happened during weekend is important. Oil prices across the World have suddenly come down on the news that the top three oil supplying companies coming up with the news that they are planning to increase the supply on the growing demand. That has pushed Crude prices down and from close to 80 dollars Brent lost 5 dollars and now its trading at 74.8 dollars now. Asia is in the green now and that is a good news.
Domestic Cues
On domestics, there are quite a few fundamentals to look at. Bypolls for 10 assembly segments and 4 lok sabha seats today and their results will have a big impact. Any losses here means BJP will lose the majority mark of 272 in Loksabha. Another fundamental is the monsoon which is likely to hit Kerala according to met department as early as tomorrow. That will be the good news for the market. Plus there are some last set of Q4 results that are going to come today. First is L&T which will come up with numbers and apart from that PSU companies like NTPC, NMDC and oil marketing companies like IOCL will declare their Q4 today.
Derivatives Action
On the derivatives front, there was a massive buying that happened on the Nifty futures on Friday but the selling still continues as Nifty is inching higher. That has put the Nifty long positions at 47% which still means that there are 53% short positions. However in the options market puts are in demand and Put call ratio surged to 1.47 from 1.29 levels seen on Friday morning. The puts that are in demand are the 10500 and 10600 put where the positions went up as nifty was going up. 10700 and 10600 call saw some unwinding.
What is the Nifty and Bank Nifty call for the day?
The lower crude and positive Asia means we will have a slightly positive open around 10630-10650 zone and what happens from there needs to be seen. Remember that series high is 10930 and technically nifty has legs to go there. But 10800 will be a strong hurdle and for this series a long position now taken below 10650 with a target of 10720 can be taken. A hedge for that I would be suggesting during the course of the day.
Bank Nifty will be at 26300 and another long position there with 26500 is something you can look at, with some tight stop losses.

Market Trade Setup 25th May 2018 – #Nifty

Markets and News
Week 4 of the longest series running for 35 days comes to an end today and things are kind of settling down. The major fundamental is the Trump’s decision to cutoff the proposed meet with North Korea at Singapore. Not going well for Asia and Dow Jones reacted negatively to it. Second is the Fed’s decision to allow the inflation to go higher and accordingly rise the interest rates. So, in all probability, there would be a rate hike in Fed’s June policy. This fundamental has pushed the dollar index again and it started going to 94 again and this will have some impact on Rupee today.
Domestic Cues
On the domestic front, its not going great today as the Petrol prices went up for the 12th day running, making up for the losses for 1 month, when Govt did not change the prices due to Karnataka elections. The Brent Crude however has cooled off a bit and has settled at 78.6 dollars. The Q4 results however continue to come average with some companies like cummins which declared a bad set of numbers while Pidilite was good. Today also the action will continue with Bank of Baroda, the big PSU coming with their Q4 today.
Following are the Q4 results expected today.
1. Bank of Baroda
2. BEML
3. Good year tyres
4. Hindustan Motors
5. IDBI
6. Indian Hotels
7. Jagran publications
8. Jindal SAW
9. Sun Pharma
10. Tech Mahindra
Derivatives Action
On the derivatives front, the relentless selling by FII’s is continuing in the Futures market and the overall long positions has now dropped to 45% which is the lowest in this series. The premium has totally eroded and now Nifty futures are trading at a discount of 9 points. This is a bearish sign and unless there is a short covering the market won’t go down on this trend. The options market is also seeing a different trend today with a lot of put buying taking the Nifty put call ratio to 1.29 from 1.18 level. 10500 put add 9.3 lakh contracts and 10400 put added 5.9 lakh contracts while on the call side 10700 call added 6.1 lakh contracts.
What is Nifty and bank Nifty call for the day?
Asia is not positive and that means we will open flat around the 10520-10530 mark and what happens from there needs to be seen. 10550 will present a strong resistance and on the downside 10500 might offer support. Today is the weekend and positions will be closed in the afternoon leading to volatility. I would suggest you to wait and watch today. Avoid taking any positions and come back fresh on Monday morning to trade in options market in the expiry week.
Bank Nifty is more positive than Nifty and so any drop to 25900-25950 zone should be taken as a chance to enter into a long position to be taken to next week with 26150-26200 as a target. This is for weekly trade not intraday.