Tag Archives: Expiry

Stock Market Trade Setup 14th March #Nifty #India

Market Setup 14th March

Just when we thought that the rally that continued for almost a week finally came to an end, yesterday saw another rise of 40 points on Nifty and we saw it closing at 10341. Every possible resistance is being broken today and how long this rally will continue only time can tell. World markets also celebrated yesterday with technology stocks rising all over and Dow Jones gained 140 points to compensate for the loss the previous day. Boeing is getting banned all over the world and its impact will start showing soon. Asia also has opened in the positive territory today with Hong Kong and Japan up 100 and 140 points respectively. 

On the domestic front, one factor which will now start worrying is the rise in the brent crude prices. After a while Crude broke the 64-67 mark and now trading at 67.7 dollars. This means we have a chance of Crude touching 70 dollars during the election time, which will make it inevitable for Govt either to hike fuel prices or to absorb the losses which will put pressure on Oil marketing stocks and the fiscal position of the Govt. Petrol price is at 76.91 rupees in Hyderabad. On the other hand Rupee is strengthening in last few days and has come to 69.5 to dollar and today if Rupee also depreciates then we have a tough situation to deal with.

On the derivatives front, there was a huge amount of buying in Nifty futures and market seems to have a feeling that Nifty will touch 11500 mark in this series itself. The long positions which were at 55% yesterday morning went all the way up to 59% by the end of the day. However, the options market was mixed with demand for calls and puts coming in equal measures. That has kept the Nifty put call ratio constant at 1.81 and since today is expiry, this is a tolerable level. For today’s expiry the maximum open interest is at 11300 put and 11400 call indicating that the movement today could be in this range. 

What is the Nifty call for the day?

Another flat opening around 10330-10350 range is expected today and the expiry factors will move it on both sides of 10350. There is a chance of expiry happening all the way from 10280-10410 and the possibility is more towards 10340-10370. Yesterday also you would have profited by the positions taken and for 3 consecutive days, you have traded. Today, I would suggest you to take a pause. If things don’t go right, then you will burn your pockets and I am not getting a confident view on Nifty so I would advise you to AVOID trading today and see how the expiry pans out. 

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.


Stock Market Trade Setup 27th December #NIFTY

Market Trade Setup 27th December

What a rally to back up the big fall!! There was a 653 point fall on the day before Christmas for Dow Jones and what recovery we have seen in the US markets on the boxing day! Dow gained almost 5% on a single day and went up by a whopping 1100 points on a single day erasing all the losses. In fact, it is the first ever 1000 plus point gains for Dow Jones on a single day. Looks like fears are temporarily put to rest and on the back of the news that Fed Chairman’s job is safe. He also seems to have got the message and now the rate hikes will slow down. Asia is trading high on the US recovery with Japan up by 700 points and Hong Kong nearly 200 points.

On the domestics, today is the day of expiry day for the last series of the year 2018 and it is going to end in a tie of 6-6 unless there is a rapid movement in Nifty which can take it above 10858. This series started at 10858 and now it’s at 10729 which is nearly 130 points down. 130 points are easy to recover because the last expiry took Nifty up 129 points. So, we have an exciting day where Bulls have a chance of making it 7-5 or bears coming back and making this 6-6. The 50-day moving average is protected and now we are exactly at 20dma and 200dma is at 10760. So, this is a mountain that Nifty has to climb if it has to pass the 10800 mark

On the derivative front, the dramatic recovery seen yesterday afternoon has taken the Nifty put-call ratio to 1.35 from 1.26 and there were a lot of positions created across the strikes. 10000 put still has the highest open interest which is happening for the first time where the expiry is not defined by the strike with highest open interest. 10500 put has second highest open interest at 36.7 lakh positions and 10600 and 10700 has open interests at 32.1 and 31.4 lakh positions. We can see some moves here today and if Nifty goes up then 10700 put will attract a lot of open interest. On the call side, 11000 call has the highest open interest which is anyways not going to be achieved but 10900 has the second highest open interest and my view is expiry markers lies between 10700-10900 strikes. 

What is the Nifty call for the day?

Today is the expiry day and the moves would be mostly defined by the open interests that are building up. Globally things have recovered which means if Nifty manages to hold the 200dma then it can go up to 10850 levels. The 3 PM moves are losing their charm as there was no 3 PM move seen in the last series. After a big move yesterday we will have to see if there will be any meaningful 3 PM move. So, the safe bet is to go for 10800 short straddle which is at 95 rupees and that gives you protection from 10705 to 10895 and that should be good enough for this series.

Market Trade Setup 25th October #NIFTY

Market Trade Setup 25th October

Finally, the series that was the most treacherous this year is coming to an end. Finally, expiry day is here and we are going to start on another negative note. There was a massive sell-off in the global markets yesterday and that started off with Europe yesterday afternoon. What started off as a minor sell-off became a major 600 point fall for Dow Jones which is the biggest fall for Dow this year and with this, it practically erased all the gains made this year. The main reason for the fall is the increasing inflation which it is feared, will result in an increase in interest rates thus moving money from equities to bonds. Asia also followed the trend and Japan is down almost 700 points now and Hong Kong is down nearly 500 points. All the markets in Asia are in deep red.

Coming to domestics, today is the expiry day and this series clearly belongs to bears as the fall is almost 753 points till now. This if we compare to 700 points in the last series we are almost 1500 points down in two months. This will make it 5-5 for bulls and bears and we start November with almost no gains. We were at 10500 in January and right now we are at 10200 and that means we are losing almost 3% of wealth year to date. The positive series did not gain as much as the losses that negative series has had. February, March, September and October all the series lost more than 500 points. The only fundamental that is positive for us is Crude oil which has now gone to 75.4 dollars from 76.5 dollars yesterday and that brings no cheer for the market.

Coming to derivatives, there was a lot of volatility in the futures market as the market started to fall, rise, fall and then had a major up-move in last one hour. The roll overs in Nifty futures were higher than average at 65% and with still a day to go, there is a belief that November series will be better than October. Options market also has a different story to tell as Nifty put call ratio moved back to 1.10 from 1.04. There were some short puts taken at crucial levels and that resulted in PCR moving up. 10000 put added 5.9 lakh contracts and still, it continues to be the base for the market. On the call side, however, the base shifted from 10500 to 10400 where there are 30.3 lakh open positions compared to 30.2 lakh positions at 10500 strike.

What is the Nifty call for the day?

A red Asia means we will also open in deep red around 80-100 points lower and that means we will start at 10150 mark. There are few scenarios that can be built from here.

1. Nifty starts going up from 10150 go to 10250, stabilize there have a 3PM move which takes the market to 10300 and close just below there. The other scenario is a fall from 10250 at 3PM and close above 10200 but below 250.

2. Nifty remains in 10150-10200 range for a long time till afternoon and then have a 3 PM move up that takes it to 10250 and close between 10200 and 10250. The other scenario is a fall from 10200 back to 10150 and closes below 10200 mark

3. The Nifty starts to fall again and test 10100 and remain there till 3PM and a 3 PM move upwards taking it to 10150-180 zone and expiry t 10150 level. A downward 3 PM move will make it close below 10100 mark above 10050 mark

4. This is a dreaded scenario where there is a fall below 10100 and a 3 PM move sharply taking it below 10000 mark and might close below 10000. This is a remote but a 5% probability. So my call for the day would be to stay out.

I have given you a buy or a sell call in 8 out of 10 expiries this year and today am asking you to stay out. Expiry days are good to trade but with so much volatility around, money in the pockets is better than money thrown into a whirlpool.

Market Trade Setup 24th September #Nifty

Market Trade Setup 24th September

The expiry week is here for the September series. This could be the most dangerous expiry week I have seen in last 2 years. I am not saying that because there will be a fall, am saying this because of the way market fell and recovered on Friday. That opened up the volatility and high volatility on expiry week is something which is dangerous. Last 3 series saw a 1200 point gain of Nifty and with Friday’s low of 10860 levels means we have corrected 61.8% at 11000 levels and Nifty has moved above that level now. The risk now is will this hold or are we going to see Nifty test 11000 another time?

Globally things are not looking that fine, with Dow Jones closing almost flat and most of the Asian markets are in red. Hong Kong is down more than 300 points and the other Asian markets are also trending in negative. The Brent Crude is worsening now and its almost at 80 dollars level now. On the domestic front however the DHLF crisis seems to have temporarily settled with management saying that all is well now but I&FS is in deep trouble and resignations are happening at the top. All this will have some impact on the market today.

On the derivatives front also, bearishness seems to have gripped the market. The Nifty premium for futures is dropping rapidly and the focus has shifted to Options on Friday itself as many traders went on a buying spree. Lot of put buying was seen on Friday where 5 puts were bought for every 2 calls and when it comes to shorting the scenario is reversed. 5 calls sold for every 2 puts sold and that kept the Nifty put call ratio unchanged at 1.14. 11000 put and 11500 call still continues to have highest accumulated open interest triggering volatility in the market.

What is the Nifty call for the day?

Friday saw almost a 400 point swing on the Nifty and today it will be another flat to negative opening around 11100 levels and 11000 is the support for the market for any drop. On the upside the market can touch 11180 levels and that might present a resistance. We are in a clueless zone now and I feel we need to see the market for sometime before venturing into any positions. This is a very volatile market and one needs to establish the direction clearly before going for any positions.

Market Trade Setup 24th July

Market Trade Setup 24th July
Finally Nifty was able to break the 11050 mark and closed above that. So, everyone is talking about the breakout that has happened. Now, you all might have understood why I asked you to wait and watch yesterday. Global markets have also become positive and S&P 500 closed at a record high last night and Dow Jones ended flat. The uncertainty in Japan continues but the news of monetary stimulus by Bank of Japan might act bit positive. Asia is up today with Hong Kong gaining more than 300 points. Brent Crude is still below 73 dollars and that keeps the crude worry away.
Domestic Cues
On the domestic front, the big news comes from the inter-creditor agreement where in more than 17 banks have signed an agreement for reducing NPAs and bad loans. The NBFCs are also free to join the agreement. SBI is the leader of this and some of the private banks like ICICI and HDFC also are likely to join this soon. This could be a huge positive for bank nifty. The Q1 is now slowly starting to show some negativity. After the HDFC disappointment, monday also was not a great day for the results. United Spirits has disappointed in both volumes as well as EBIT. ACC was however good with 28% growth on EBIT.
Following are the Q1 results expected today.
1. Asian Paints
2. Borosil
3. Century Ply
4. Glaxo Smithkine Pharma
5. Hexaware
6. ICICI prulife
7. Inox Leisure
8. Naukri
9. Network 18
10. Radio City
Derivatives Action
On the derivatives front, there was some shorting that was seen yesterday in Nifty futures after Nifty crossed 11050 expecting some correction and that has brought Nifty long positions is at 53% vs 54% seen at the beginning of the day. The options is making news with Nifty put call ratio went to an overheated 1.8 vs 1.71 at the beginning of the day and it is not really unusual just before expiry. 11000 put has the highest open interest now with 10 lakh positions added there and 11070 is a strong support. 11000 call is emerging as the strike with highest accumulated open interest and at 50 rupees premium 11200 can be the roof to the series.
What is the Nifty call for the day?
Nifty will open flat around 11090 levels and 11130 might be touched during the day and there it might encounter some resistance. Now with just 2 days left for expiry its time for playing with options and I suggest 11050 strike for a short straddle and it has a premium of 125 rupees which means you get a protection from 10025 to 11175.

Market Trade Setup 28th June #Nifty

Markets and News
Finally, the expiry day for the 6th series of the year. The score is now 3-2 with bulls taking January, April and May series and bears took at February and March series. June as of now is 65 points down having started at 10736. The global markets have undergone a lot of volatility with US going up 250 points up in the first half only to lose 400 points in the second half to close 150 points in negative. The trade sanctions fears seems to be ruling the global markets and Asia is also moving between red and green today.
Domestic Cues
Coming to domestics, Rupee is at 68.60 just few paise away from its all time low and today it might hit the all time low and that might have some impact on the stock market. Coming to this expiry the broader market is holding but nearly 460 stocks have hot the 52 week low and derivatives market is holding on just for the expiry. If Nifty recovers today then it has a possibility of turning into green series for that it needs to recover 65 points. All eyes are on last series expiry day when Nifty went up by over 100 points on the expiry day. If that happens today than we will have 4 bull series this year.
Derivatives Action
On the derivatives front, its all set for expiry and the focus is on the options and the expiry. We are at a series lowest of 1.20 in put call ratio as massive positions were created yesterday on the call side. 10800 call has 17.7 lakh contracts which is a record. 10750 call has 12 lakh positions and 10700 call has 11.2 lakh positions. So at 20 rupees premium 10720 will be the first resistance, if broken then it will encounter a huge resistance at 10750. 10700 put saw the maximum unwinding of 19 lakh contracts another record which brought down the accumulated open interest to 31.55 lakh positions. 10600 put also has 31.59 lakh contracts and now 10600 which is at 11 rupees premium makes 10590 the official new floor for the market.
What is the Nifty call for the day?
Asia is mixed and so we might open flat at yesterday’s close of 10670 levels and if there is a fall we might touch 10600 levels. If in the early morning there is a recovery to 10700 then some put shorting will happen at 10700 and that will build the base at 10680 and Nifty might expire between 10680 to 10720.
Another scenario is if Nifty stays below 10680 then put buying will happen at 10600 level and that will bring Nifty to 10600 levels. That will upset many positions. So, if Nifty is weak in the morning and till 11am if its around 10660-10680 then it is better to buy the 10600 put and wait for a slight increase in premium and sell it off. Risky trades, you need to be careful. Wait for my tweets.

Market Setup 22nd March

Markets and News

As we are approaching towards the end of another week, we have the Fed hike that is the topic to talk about. Fed has hiked the interest rates by 25 bps from 1.50% to 1.75% and have said that there could be 3 more rate hikes in 2018 not just 2 as predicted by many. The GDP forecast is very strong at 2.7% for 2018 and 2.4% for 2019 and that is something that justifies the rate hike. The tone of the Fed was hawkish and that had its impact on Dow which closed flat to negative but emerging markets seem to have been in positive zone. But the worries are there on Crude oil front with Brent Crude dangerously close to touching 70 dollars again and that is not a great now.

Domestic Cues

On domestics front things look average for us with no real fundamental ruling us and its all left to technicals to take care. Yesterday the resistance of 10180-10200 was broken to go to 10225 levels only to come back again to 10150 levels. The 200dma is still not crossed decisively and the market has to decide very clearly whether to go up rapidly above and cross 10300 or go to 10000 test it and break it. The worries on Crude will weigh on the market and dollar might strengthen a bit on a weaker dollar and could strengthen to go below 65dollars.

Derivatives Action

On the derivatives front the Futures market saw both longs and shorts but the short positions slightly overweighed the long positions and the overall longs in the system fell to 42% another new low in 2018. The shorts in the system were up mainly due to the fall in the market around the noon. The options also has seen puts being more in demand than calls and that marginally took the put call ratio to 1.07 from 1.06. The 10200 and 10400 call saw massive unwinding of positions to the tune to 6.8 lakh and 6.6 lakh contracts while the 10000 put is still having a maximum open interest build up of 10.1 lakh contracts. 10100 put also saw shorting from the afternoon onwards.

What is the Nifty and Bank Nifty call for the day?

Today is the bank nifty weekly expiry and I feel Bank Nifty could open around 24300 levels and then try to touch yesterdays highs before correcting. So taking a short position around 24300-24350 levels with 24200 as a target can work and wait for my call during the day for options positions.
On Nifty front, the green Asia means we will open around the resistance level of 10180 and 10220 will be a very strong resistance. You could go for a short position around 10190-10220 range with 10150-10160 as the target. Keep it tight and wait for my tweets for further positions.