Tag Archives: Crude

Market Trade Setup 10th December #NIFTY

Market Trade Setup 10th December

Firstly today Nifty is going to open on a big gap down and the entire blame of it need not be taken by the exit polls. Friday was a horrible day for the US market where Dow Jones lost more than 550 points on the fears of global slow down being a reality now. NASDAQ is even more worst as it lost more than 3% and the Brent Crude has risen by over 5% and quickly it moed from 59 dollars to 62 plus dollars on the back of cut in oil production and a drop in US weekly inventories. Asia is also in deed red today morning with all the markets down by more than 1%. Hong Kong and Japan are close to 500 points down. 

Coming to domestics, we have many problems to deal with. First is the fiscal deficit which comes at 2.9% of GDP upto Q2 of this financial year. It is a very bad sign as spending is very high and Govt is unable to control it. Brent Crude going up more than 3 dollars will put pressure on some of the oil marketing companies but the news we cant ignore is the Exit poll results. There were 9 exit polls which were conducted for 3 states of Rajasthan, MP and Chhattisgarh. For Rajasthan, 8 out of 9 exit polls say Congress is going to win and 1 exit poll predicts a slender win for BJP. In MP 5 exit polls predict win for Congress and 4 exit polls predicted win for BJP. In Chattisgarh 4 exit polls predicted a win for Congress and 5 predicts a win for BJP. So, , even more, not a good news for the markets. 

On the derivatives front, the last one hour of trade saw some bullish positions coming onto the market. Though the Nifty futures positions remained stagnant with longs and shorts almost in equal, the options market saw Nifty put-call ratio going up from 1.44 to 1.47 levels. 10500 put added 4.9 lakh positions, 10600 put added 4.6 lakh positions and 10000 put added 4 lakh positions and 10000 put now has the maximum open interest at 41.9 lakh positions. On the call side 11200 call added 5.1 lakh positions and 11100 call added 3 lakh positions and 11000 call though has shed open interest, it Chhattisgarh the highest in open interest. All this will change today if nifty opens big gap down.

What is the Nifty call for the day?

Global slowdown fears, increased Crude prices, worsening fiscal deficit and exit polls throwing up possible losses to BJP will mean we will have a huge gap down of more than 120 odd points and we might open around 10550 zone and that means we will be back to protecting 10500 again. On the downside 10480-10500 will offer support and a rally in the late day might take Nifty past 10600 mark. So, I suggest going long on this fall around 10520-10550 levels with 10620 as the target

Market Trade Setup 16th November #NIFTY

Market Trade Setup 16th November

The Weekend is here and we still have 10 trading days still left for expiry and this is a long series. I gave a no trade call yesterday and Nifty remained in 10550-10610 zone and you might think retrospectively that you can make some profit by taking long positions intraday. These are tight trades that nobody can accurately predict and unless Nifty crosses 10650 and stays above it, its not a sign that markets will go up. Dow Jones recovered yesterday after 2 continuous days of fall and went up 200 points. Asia is more or less flat today and the main news that will dominate Europe is the Brexit and we have to see what happens on this front in the next few days. The minister in-charge of Brexit has resigned and within the conservative party there are multiple views. So, this fundamental will dominate for sometime.

On the domestic front, there are two not so good news to talk about. First is the trade deficit numbers for October has not been great as trade deficit widens to 17.1 billion dollars and this is not a good number compared to the deficit of 14.6 billion seen in October last year and 13.9 billion seen last month. The main reason is due to the high import bill of Crude as both the Brent Crude as well as rupee were negative for us. Oil imports stood at 14.21 billion compared to 10.1 billion in september. Imports stood at 44.11 billion vs 37.5 billion seen same month last year while exports grew to 27 billion from 22.9 billion seen in the same month last year.

The second news is the crucial RBI meeting on Monday which can decide many things and which has the potential for many things to go wrong. S. Gurumurthy who is the board member as well as a right wing activist has criticized the monetary policy for only focussing on inflation and not on liquidity. When the board meets on Monday, it could turn into a stormy session if the two groups within RBI start going against each other. So, market will look at the event with some nervousness as we dont know which way the events will go. The other fundamental is the Brent Crude which after falling to 65 dollars has slowly moved upto 67 dollars now.

On the derivatives front, the action was almost mixed in the options market and the Nifty put call ratio remains at 1.61 and that indicates how stagnant this market is. 10200 put continues to add some open interest and yesterday it added 1.6 lakh positions. Now the total open interest at 10200 put is 33.5 lakh vs 10000 put that has 48.9 lakh positions. On the call side 10800 call added 1.3 lakh positions and the total open interest there went up to 30.5 lakh and 11000 call still has the maximum open interest at 34.1 lakh contracts. Next week things might shift a bit and we need to see which way things go.

What is the Nifty call for the day?

A mildly positive Asia means we will open a bit gap up at 10650 levels which is also the resistance zone. Will Nifty take out this resistance and go to 10680 in the morning or will Nifty again correct a bit and touch 10600 levels!! A lot of questions to be answered and we also have a very important fundamental on Monday and that might not make the market very comfortable. So, today also I suggest not to take any risk and just see if the 10650-10680 zone is take out or not.

Market Trade Setup 14th November #NIFTY

Market Trade Setup 14th November

Patience is a very important virtue in the market and the one who shows it is always in with rewards. When we entered into long positions on Monday at 10550 range with 10650 as the target and when Nifty fell 100 points on that day to close below 10500 we were sitting on huge losses. Yesterday wiped out all those losses and we were back to levels at 10580 again. Today there will be a gap up which will make Nifty open above 10600 levels and most probably we will meet our targets today. Apart from that the long straddle and the long call opened on Monday and yesterday were closed at 20 and 80 point profit giving another 100 points additional profits. Thats why patience in the markets always pays off.

The big news today is the Brent crude prices which now have seen their worst intraday fall since 2015 and now trading at 65.2 dollars. Brent was 86 dollars 5 weeks ago and today is cheaper by 21 dollars and the rupee also appreciated by more than 2 rupees which will make buying of crude very economical and good. Globally the fall in demand for crude due to slowing growth is seen as the main reason for the fall in crude prices. Across the World and for many economies that might not be a good news but for India it is a great news as we are mostly a crude dependant economy. Dow Jones fell by 100 points and all the Asian markets are trading in red.

On the derivatives front, there was a complete reversal of positions seen in the options market. The Nifty put call ratio which was at 1.51 at the beginning of the day went to 1.60 at the end of the day. The equation is simple. The PCR corrected from 1.60 to 1.51 on Monday when Nifty fell 100 points and it went back from 1.51 to 1.60 when Nifty went up 100 points yesterday. Despite the rally 10000 put actually lost open interest to the tune of 1.7 lakh positions which indicates that the base of the market is now ready to shift from 10000 to 10200 now. 10200 put added 4.1 lakh positions while 10300 put added 3.9 lakh positions. Now 10000 put has 46.4 lakh open positions and 10200 put has 34.1 lakh open positions. On the call side 11000 call still has 32.8 lakh open positions while 10800 call has 28.6 lakh open positions.

What is the Nifty call for the day?

After small profit on Monday, and a reasonable profit yesterday today, you will achieve the 10650 target that you set out with on Monday. Nifty will open slightly gap up due to the crude positive fundamental and we might see a 10600-10620 range opening and Nifty will go to the 10640-10660 resistance zone where it might encounter some problem. It is better to exit the long position in this 10640-10660 range and take your profits home. Today I would like to see what Nifty will do, whether it has the legs to touch 10700 levels. So, exit positions and wait and watch what Nifty does.

Market Trade Setup 13th July #Nifty

Markets and News
Weekend, Friday, the 13th the unluckiest day of the year. But the week looks good and all that is needed is for the market now is not to lose what it had gained this week and close with the gains intact, if not increase the gains. Dow closed in the positively last night with 200 point gain, Europe also closed positive and Asia is also looking green except Shanghai market which is 0.5% down back on the US trade sanctions. Brent Crude saw further fall and now it is below 74 dollars and can we said it touching 70 dollars? We need to wait and see.
Domestic Cues
On domestics, there are a lot of domestic cues to look at. The first is the CPI inflation for June that came at 5%. That number looks uncomfortable for many, who saw 2% and 3% inflation in last many months but if you look at it carefully it comes on a base of 1.46% seen last May which is a very low base. The best news for me is Food inflation which comes at 2.9% vs 3.1% in the previous month and -2.1% in May 2017. Imagine a 2.9% figure on a negative base. It means Govt did a fantastic job in controlling food prices. The only worry is the core inflation which is non food and non fuel inflation which comes at 6.3% vs 6.2% in the previous month. This could mean RBI will go for another rate hike in their August policy.
We had another macro data in the form of IIP for May, that came in yesterday and it came in at 3.2% vs expected figure of 3.9% and vs 2.9% seen in last May. Manufacturing is still lower at 2.8% and the bad news is from the FMCG sector which had a negative growth of -2.6% vs 9.7% seen in the May last year. The good news is however from capital goods at grew at a healthy 7.6% vs -1.6% seen in the same month last year. And coming to Q1 results we are going to have Infosys coming up with their Q1 in the evening after the markets close. So, you can see the reaction only on Monday.
Derivatives Action
On the derivatives front, yesterday things went bullish again as Nifty crossed 11000 and the overall long positions in the futures also crossed 50% and now we are net long with 51% long positions and 49% short positions. The options market also saw a huge surge in the bullish positions and the nifty put call ratio surged to 1.73 from 1.67. 1.73 is a overheated zone where puts will give you profits 73% more than calls. That got proved with 11000 put adding 15.4 lakh contracts and 11000 call unwinding 4.7 lakh contracts. Now 11200 call is active with 5.9 lakh contracts getting added there. So there is a feeling that Nifty will not fall below 10920 and will go as high as 11220 in this series.
What is the Nifty call for the day?
The cues look good but yesterday afternoon the market fell a lot especially the mid caps and that might have an impact on Nifty today. Nifty might open around 11050 and might go to 11080 but beyond that Nifty will find it difficult to go. 11000 might come as a support zone and also the 10950 which might act as a very strong support. I would suggest today, to go for a short position at the open around 11050-11060 levels with 10980-11000 as the target as it is a friday and lot of covering of positions might happen in the afternoon.

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
3. Good year tyres
4. Hindustan Motors
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.

Market Setup 23rd May

Markets and News
Mid week blues are back both globally as well as domestically. After a handsome rally of 300 points on Monday, US markets lost some of its gains and Dow closed 180 points and the global geo political tensions are responsible for it. Donald Trump made two major announcements that brought US markets, first was that the summit which was scheduled with North Korea might not happen at all and second is he is not happy with the measures that China is taking in restoring trade ties with US. Both are the fundamentals which will have an impact on Asia and that is why Asia is in the red today with Hong Kong losing 300 points, Nikkei losing over 200 points.
Domestic Cues
On domestic front, Crude is still in the news with Petrol and Diesel prices going up for the 9th day straight and now everyday is a new all time high. For your understanding these are the petrol prices in important cities in India at 6AM today, 23rd May.
1. Mumbai 84.99
2. Chennai 80.11
3. Delhi 77.11
4. Kolkata 79.83
5. Bangalore 78.12
6. Hyderabad 81.43
On the Q4 front there was a disappointment in the Q4 results with almost everyone except Bata coming out with disappointing results. SBI came up with a loss of over 7,700 Crore but that is majorly due to identification of all the bad loans, stressed assets and NPAs. This was expected to be around 10,000 cr but a lower than expected figure has acted bit positive. This is the sad story that a lesser than expected loss also rallies the stock. Otherwise also, Pharma companies like Cipla and Dr. Reddy’s also have come up with bad numbers.
Following are the Q4 results expected to come today.
1. Archies
2. Bajaj Electricals
3. BPL
4. Bayer corp
5. Dhanalakshmi Bank
6. Eros Media
7. Finolex pipes
8. Godrej Industries
9. Grasim
10. IFCI
11.Jet Airways
12. NATCO Pharma
13. Shalimar Paints
14. Tata Motors
Derivatives Action
On the Derivatives front, things are looking bleak again with a lot of selling that started in Futures market as Nifty was unable to cross the 10550 mark inspite of good global factors. The overall Nifty long positions which were at 52% yesterday morning fell below 50 and closed at 49.5% which is the lowest in this series. This means there are more shorts on the system than the long positions. The options data is also confirming that with the Nifty put call ratio going down to 1.23 from 1.28 because of unwinding of puts and shorting of call positions.
What is the Nifty and Bank Nifty call for the day?
Global factors, especially a weak Asia means we will open flat to negative around 10520 levels and immediately 10500 will be tested. If that is taken out then Nifty might go and test the 50dma of 10456 and that might come as a support. So, the point is if 10500 is broken we can look for initiating options positions like a strangle which I will be tweeting you in the course of the day, depending on the premiums.