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 is 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 moved from 59 dollars to 62 plus dollars on the back of a cut in oil production and a drop in US weekly inventories. Asia is also in deep 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 up to Q2 of this financial year. It is a very bad sign as spending is very high and the 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 can’t 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, 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 Setup 7th December
The Weekend is here for the first week of December and what a forgettable week this has been! Dow Jones has fallen another 800 points and from there it recovered to close just 80 points in red. That 700 points plus recovery on US markets has sent a positive global signal. Fed’s statement that it will wait and watch before going in for rate hikes has pushed the sentiment. Asian markets have recovered and have come to the positive territory wit Hong Kong, Japan, Korea and China in mild green. The Dollar also has weakened a bit and Brent Crude also has fallen below 60 dollars again and now trading at 59.1 dollars per barrel.
Coming to domestics, today is the day of elections in two crucial states of Rajasthan and Telangana. BJP started as a big loser in Rajasthan and 3 months ago everyone was talking 130 plus seats for Congress and from there, things have dramatically changed. Rajasthan today has become as unpredictable as Madhya Pradesh and Chhattisgarh. Telangana also has from a position of a cake walk to KCR has turned itself into a heated battle between KCR and Mahakootami. The market will get the feel of the sentiment by 2 PM today and we can see it getting reflected. Added to this is the exit poll results which will come today after market hours and that will lift some suspense from the results.
Coming to derivatives, yesterday also saw huge selling in the Futures market and the overall long positions in Nifty futures has come down to 56% from 57% and this is the lowest in the series. On the options front, the Nifty put-call ratio plunged to 1.44 from 1.63 seen at the beginning of the day. Lots of put positions taken on the long side were unwound and a lot of short positions in the calls was also taken. 11000 call has added 13.1 lakh positions, 10700call added 9.9 lakh positions and 10900 call added 4.8 lakh positions. On the put side, 10500 put saw 5 lakh positions taken out. 10900 put saw 3.9 lakh positions taken out. 10000 on put side and 11000 on call side still continue to have highest open interest. 10200 and 10500 puts are close and might add some open interest today.
What is the Nifty call for the day?
Finally the fall seems to have come to an end. We did nothing but watching it. One has to understand that stock trading is all about waiting patiently when unforeseen things happen, try to come out of it without panic. Global growth scare came from nowhere and took away 300 points from Nifty. Today we will recover some of it if other things go fine. Today Nifty will open gap up between 10660-10690 levels and 10750 is very much a possibility today on an intraday basis. If the sentiment in Rajasthan goes fine we can even see a close at 10750 levels. So, the losses that you made will be cut down drastically today. Hope for the best and wait for the next week when the actual results will be out!
Market Setup 6th December
Fear has no bounds! It can come at a time when everything is alright and take away everything that is alright! We were seeing a handsome recovery and US was showing a lot of signs of growth with GDP coming higher in last few quarters and the Fed made lot of positive statements. Just 2 months ago everything in US was looking bright with jobs data at its highest in a decade and the unemployment at its lowest. Suddenly, fear of whether this growth will sustain or not grips and takes away everything that has grown till now. Global fears are still ruling the markets across the world. US markets were shut yesterday in respect of George W Bush but Dow Futures which are trading in other markets are giving negative cues. Even now Dow futures are down 300 points. Result is every Asian market is in deep red.
Domestically, we are going to vote tomorrow and the campaigning in all 5 states is finally over. The last phase of polls and Exit polls will come tomorrow after market hours. But what is important today is the OPEC meeting today where there is an expectation of supply cut. Will it result in Crude prices going up needs to be seen. There is a global growth scare that means lesser demand to crude so supply cut might not impact that much. Yesterday was the monetary policy day and the policy is more or less on expected lines, including the SLR cut. As I predicted SLR is cut by 150 bases points in multiple quarters by 25 bases points starting from January 2019. So, monetary policy failed to make any impact on the market that is gripped by global growth scare.
On the derivatives front, there was a massive selling that happened in Futures market especially by FIIs who sold more than 1100 Cr in the derivatives market. The overall long positions in the Nifty Futures market has come down from 51% yesterday morning to 49% by the end of the day. In the options market the Nifty put call ratio dropped as there was a lot of demand for the calls and Nifty put call ratio dropped to 1.63 from 1.69 seen at the beginning of the day. Open interest got added at maximum at 11100 call to the tune of 2.5 lakh positions and 11200 call added 2.4 lakh positions and 11300 call added 1.1 lakh positions. Still 11000 call has the maximum open interest but on the put side is still at 10000 put followed by 10500 put. Smart money is preparing for a BJP victory as well as defeat in all the 3 states where it is in direct competition with Congress.
What is the Nifty call for the day?
Things are not at all looking good for the market and today we will open close to 10700 mark and that will take us below the 200 day moving average and if we quickly dont recover to 10750 levels then we might actually go into temporary bear zone unless the exit polls tomorrow show a decisive victory for BJP. You already have a position at 10820-10840 levels and that will be in deep losses. Hold on to it for sometime as we have every chance of recovery. There are days when you have to sit tight and today is one such day. Stay out of the market and see where this growth scare will take Nifty to. No trade for today.
Market Setup 4th December
If you have not taken any long position on Nifty, as it went below 10880 levels, you would have been saved from going into red again. You could have gone short yesterday at open but that is for bears and usually, I don’t give such advice. Nifty ended almost at the same point it ended on Friday so you are at the same place where you were last week. US markets continued its rally as Dow gained another 300 points but today all the Asian markets are in red. Hong Kong is down nearly 100 points and Japan id down more than 150 points and after a big rally yesterday today its a technical profit taking that is playing out in Asia.
Coming to Domestics, today is the day where we will react to global factors and technicals, waiting for the fundamental events starting from tomorrow. RBI credit policy is something that everyone will look for but for today, it’s the technicals and Crude what will move the market. Crude is exactly where it was yesterday at 62.3 dollars and we have seen how rupee depreciated and crossed 70 mark again on the back of Crude rising again. Today, the Dollar index has stabilized a bit so Rupee would also like to strengthen today and bond yields will also remain flat as the big policy decision is awaited tomorrow.
On the derivatives front, there was a neutral action in the Futures market where the equal number of long and short positions that were taken. Due to this, the long positions remained constant at 52% but the Nifty futures premium grew from 20 points to 40 points at the end of the day which is a positive sign in the coming days. On the options front, the Nifty put-call ratio remained almost flat at 1.68 compared to 1.69 at the beginning of the day. There was a bit of call shorting and 3 calls were shorted for every 2 short puts. 11000 put added maximum open interest of 2.5 lakh contracts and 10500 put added 3.1 lakh contracts. This is bit strange and the only reason that explains this is some people are assuming a BJP victory in all the 3 states which can take Nifty past 11000 and expire above that.
What is the Nifty call for the day?
Expect the Nifty to open at 10850-10880 levels and that is a support zone. If it is taken out then 10800-10820 might come as another support zone. On the upside, 10920-10940 is the resistance and only if it is taken out then the Nifty will move upwards. If you have listened to my advice you would not be holding a long as Nifty went below 10880 yesterday to 10840 levels. Today, I suggest you to go for long if Nifty finds support either at 10850 or at 10820 with 50 points as the target. This target can be achieved either today or tomorrow.
Market Setup 3rd December
The last month of the year kick starts in a mixed way. There is a huge cheer in the global markets as the outcome of G20 summit is heartening for many. The US and China have met and have discussed trade and have announced a truce for 90 days on any further increase in trade tariffs. so, the whole world cheered up for the result and Dow Jones anticipating that has ended 200 points in the green. Today morning the Asian markets are in green with all of them up more than 1%. Infact China is up almost 3% and Hong Kong is up more than 700 points, China is up nearly 350 points. The only negative is increase in Brent crude prices which went up from 58.8 dollars to 62.1 dollars. This is also on the trade tensions reducing between US and China.
On the domestic front, the GDP number comes at 7.1% vs my forecast of 7.2-7.4% and the market expectations of 7.4%. This is a disappointment for sure as the services sector growth has got stuck. Now we are worried about the growth for Q3 where the situations looks almost same as Q2. The auto sales numbers that came on Saturday has confirmed that. There was a 20% fall in the heavy commercial vehicle sales and even the passenger and 2 wheeler segment has seen a fall. All of them had a negative growth. Added to this is the November month GST collections that comes at 97,000 Crore vs the October GST collections of 1 lakh crore. So, this dip in GST collections is also not a good sign. There are some important cues to watch this week. RBI monetary policy is out on 5th, OPEC will meet to discuss crude production on 6th and we have Exit poll results coming on 7th. So these are some domestic cues we can look at this week.
On the derivatives front, there has been some positive to mixed action in Futures and options market on Friday. The Nifty futures long positions which were at 51% in the morning went up to 52% by the end of the day. There were some longs taken after the market corrected. On the options market however the sentiment was bit bearish with Nifty put call ratio falling to 1.69 from 1.74. There was bearishness both on the long and as well as short side. 2 long puts were taken for every long call and 3 short calls were taken for every 2 short puts. 10000 put added a huge open interest of 6.5 lakh after 10700 put that added 6.7 lakh positions. 10000 put now has overtaken 10500 put for the maximum open interest. On the call side 11000 call has the maximum open interest and it added 1.7 lakh positions.
What is the Nifty call for the day?
Asia is on fire today and that means we will open gap up above 10900 level, probably at 10910-10930 levels and there it will encounter a resistance which is at 10930-10960 zone. So, there is a chance that Nifty will correct from there and might find support at 10850-10880 zone. If 10850 doesn’t hold then it is a bad news and if 10880 level holds then I would suggest you to go long at 10880 level with 10930-10950 as the target for the next 2 days. We are at a congestion zone and getting upside is not that easy. So, our targets should be realistic giving some time for them to be met.
Hockey World Cup 2018 – Odisha (India’s Best Kept Secret)
The nation is all set and geared up to host the Hockey’s biggest ever event, Hockey World Cup 2018. It is the 14th edition of this Men’s Hockey tournament and India. It is for the third time India will be hosting Hockey World Cup. First, it was Bombay in 1982, New Delhi in 2010 and Odisha in 2018. The tournament will be held for 18 days, there are 16 teams pooled into 4 groups each. Australia is the defending champions, they won twice in fact. Winning the New Delhi 2010 and The Hague 2014. Kookaburras will be hungry to make it a hattrick no team has ever done in the history of the tournament. In the 13 times, Pakistan leads the tally with 4 titles, Netherlands & Australia with 3 titles, Germany with 2 titles and India with only 1 title. The last time India won Hockey World Cup was way back in 1975 – Malaysia. The story has been completely different since then.
After 1975 final victory to till date, it has been forgettable memories for Team India. We have never made it to the semifinals in the last 10 tournaments. Whereas Pakistan has performed extremely well winning the tournament four times and runner-up twice. But both India and Pakistan have lost their strength in the last two decades and are nowhere in comparison to the top teams like Netherlands, Germany, and Australia. But always history can be rewritten and I, as an optimistic Indian would want India to reach the finals that will be played on 16th December at the Kalinga Stadium Bhubaneswar.
Hockey has lost its charm and importance that it was receiving in the early days of the game. In the 1950s to 1970s India was a lethal team in Hockey and we have great players who have become World Hockey Legends. But the Indian performance chart had continuously seen the negative trend and never in condition to go up. It’s the same story with Football which is also picking up the positive trend lately. Indian hockey is also seeing some major improvements in the game and we have seen great victories for the Indian team in the last two years building up to this mega event. India performed well in the Hockey World League Semi-Finals and Finals. So we are truly on a growth trend again and we will reach the lost heights of Indian hockey very soon. It’s our Game and Indians are slowly understanding this point. We have seen the movies made on Hockey in India, Soorma and Gold. Soorma and Gold clearly depict the heroes of Indian hockey and how unconditional was their love for the game of Hockey.
I feel Indian Hockey Team needs more and more support like the way it has received today during the opening ceremony. Kalinga Stadium was roaring in support of Indian Team captain Manpreet Singh. CM Naveen Patnaik shared beautiful insights and called for the tournament to begin. He was the Chief Minister who has closely watched the preparations for the tournament and organized an amazing and fantastic opening ceremony which had a deep concept for the people to understand.
I really hope that this Hockey World Cup will bring back the lost value of our Nation Sport back to the country and we shall many more Indians playing Hockey and one day our dream of Olympic Gold comes true! For all this, the Indian Team and the players need all of our support! #JaiHind #India
AR Rehman gave this beautiful, rich, cultural theme song for Hockey World Cup 2018!
Market Trade Setup 21st November
What a fall we saw in the last hour yesterday, I was talking about a 1% fall in the Nifty and it has happened that way and Nifty fell exactly 1% and Nifty just managed to hold 10650 mark. Dow Jones had a big fall yesterday of 550 points and with that fall, all the gains that it made in 2018 is gone. Now Dow is at the same level that it was on at the beginning of the year. The Fed policy which was tightening the liquidity and increase in interest rates has started to show a negative impact. The reason for it is, that the interest rates and inflation are increasing but the growth forecast for the US in 2019 is put at just 2%. So, this figure has created a bit of panic and the markets went on a sell-off mode. Asia also started in the deep negative but now they seem to be recovering a bit.
On the domestic front, the polls for Chhattisgarh is completed and the 2nd phase recorded 72% of polling and that is little above the 71% polling that we saw in phase 1. The initial ground reports have suggested that BJP has managed to split the opposition vote and it is looking to win above 50 seats and pushing Congress below 40 seats. This might act a bit on the market today. Another major positive news is the drop in the crude oil prices. Brent Crude which was nearing 67 dollars yesterday has now dropped to 63.1 dollars. The result is Petrol prices in Hyderabad that reached 89.06 on 4th October have now dropped to 80.98 yesterday and could go below 80 rupees by today or tomorrow. This will be a huge positive for India as any drop in crude will boost almost all the sectors.
On the derivatives front, though there was a big fall in the last hour in the trade yesterday, the overall long positions in Nifty futures market remained steady at 41%. Also, another positive sign is the Nifty futures premium which was just 5 points at the beginning of the day went to 15 points at the end of the day. The options market saw some bearish sign with Nifty put-call ratio correcting from 1.72 to 1.64 again. This is actually a good sign as PCR has receded from the overheated zone. 10800 call now has the highest accumulated open interest of 36.1 lakh contracts vs 34.2 lakh contracts at 11000. so, 10800 is now going to be seen as the roof for the market. The floor,however, continues to be at 10000 which presents a downside risk for the market.
What is the Nifty call for the day?
Yesterday I talked about repeating the trade of going long around 10700 levels if Nifty sustains 10680. As Nifty held 10700 many would have taken a long position and they are now in some losses. Wait for the recovery today and close the positions if Nifty comes in 10730 zones, though it is a minor 30-40 point profit, it is worth because there is a lot of uncertainty in the market. The opening will be flat around 10650-10670 zone and the crude fundamental might take the market up. 10750 is the 200 DMA and 10720 is the 50DMA and Nifty might gravitate between these two levels. So, I would suggest exit between these two levels. If you don’t have a position, then take a long at the opening and exit at 10720-10750 level.
Market Trade Setup 20th November
The volatility on the global markets is continuing with unpredictable upward and downward moves. Dow Jones fell by 400 points on a sudden risk-off sentiment that crept into US markets. If small and underdeveloped markets react to rumors, large developed markets react to sentiment. The sentiment is a very important part of market behavior and that can come at any time and in any form. Once the USA goes to risk-off mode, Asia follows it and today all the Asian markets are in deep red. Hong Kong is down 400 points, Japan is down nearly 200 points and every Asian market is trading in deep red. That will surely put pressure on India at the open.
Coming to domestics, the RBI board meeting that started at 10.30am yesterday morning went on till 7.30pm in the evening. The marathon 9-hour meeting decided a few things but some very important things were postponed to next meeting happening on 14th December. If we see RBI gave away 80% and Govt gave away 20% of what they wanted. Liquidity which is the most important thing, Govt won it with RBI deciding to purchase 8000 Cr worth Govt bonds. That means RBI will only issue Govt bonds and buy them back and release 8000 Cr to Govt on an immediate basis. Though the overall liquidity requirement is 1 lakh Crore and this 8000 Cr is just a fraction in that, Govt now can step by step make RBI to buy its bonds. The process has started.
The news is not great for RBI but the market will be happy with the fact that Govt was able to get what it wanted because the market is going with the assumption that whatever Govt is doing is good for the economy. Deputy Governor Viral Acharya is the only dissenting voice and his voice was silenced. As of now, there won’t be any resignations but we cannot rule out any possible resignations before 14th Dec. In the other news, Brent Crude is still remaining below 67 dollars trading at 66.7 dollars and Rupee has strengthened 24 paise yesterday to end at 71.42 per dollar. That might be a very positive sign for the market.
On the derivatives front, yesterday was a very bullish day for the market with a lot of positions taken on the Futures market and the overall long positions in Nifty futures which was at 29% at the beginning of the series has moved to 41% now. The bullishness is even more visible in options market with the Nifty put-call ratio going to 1.72 from 1.64 which is a big jump. 1.70 is the over heated level and PCR is above that level now. There is a tug of war between 11000 call and 10800 call with 11000 again overtaking 10800 yesterday by adding 3 lakh positions at 11000 call. The 11000 call has 34.1 lakh open positions while 10800 call has 34 lakh open positions. Today will be a very interesting day to watch whether 10850 is the roof for the series or can we see a 11000 this series.
What is the Nifty call for the day?
Asia is red with almost whole of Asia down by almost 1%. A 1% fall for India means we will go to 10650 levels. But will that happen? The opening might be around 10720 levels like yesterday which is again below the 200 day moving average and 10700 might act like a support and if that is broken then the journey towards 10650 will start. We might get a support there and there can be a recovery back to 10750-10780 levels like yesterday and so, you can repeat the yesterday’s trade, when Nifty comes to 10680-10700 level with 10750 level as the target.
Market Trade Setup 19th November
As we enter the 4th-week good tidings seem to be on its way. I was suggesting caution for last two days as Nifty has to cross 10650-10680 zone to move further up. If you have observed Friday closed with Nifty above 10680 and it gives some indication that Nifty has finally overcome the trading band of 10400-10650 zone. There is an important 200dma at 10750 and if that is crossed then 11000 is on its way. So, one more small hurdle in the form of 10750 is remaining before it goes upward. The global markets are doing good with Dow closing 130 points up on Friday and today all the Asian markets are in green indicating that there is nothing negative for India at the start.
Coming to domestics, this is where some caution is required. There is a crucial RBI board meeting scheduled today and point also is, its an internal RBI meeting and it’s not obligatory that the details of the meeting should be made public. So, a lot of rumors can float and if the meeting goes bad and if there are any resignations then that will have an adverse impact on the market. This meeting will touch upon the issue of liquidity. Govt wants more liquidity in the market, that is more money to make available to the public but RBI wants to target keeping inflation low by controlling liquidity flow. This divergence in stand has reached a flash point now and things might get ugly if one of them don’t soften their stand. So, let’s see what emerges in RBI today.
On the derivatives front, we are into the 4th week in November but the overall long positions in the Futures market are at 39% and this is a cause of some worry. As Nifty is going up the long positions are not going up. so, this might trigger sharp short covering up-moves but it can also see fresh shorting leading to sharp downward moves. So, all this presents a scenario for a volatile move in the next 9 trading days. On the options front, the Nifty put-call ratio is also at 1.64 vs 1.61 seen at the beginning of Friday. This means we are approaching the exhaustion zone of 1.70 which will make put shorting unviable and slowly the demand will start moving towards calls which is possible only when the market corrects. Friday has changed the roof of the market from 11000 to 10800. Now 10800 call has highest open interest and at 60 rupees 10860 for now is the highest point for the market. On the put side 10000 still has the highest open interest.
What is the Nifty call for the day?
A green Asia will ensure a 10700 plus opening for us, in the range of 10720 level and what happens after that needs to be seen. 10750 is the 200-day moving average and we might encounter a resistance there and with so many events its difficult for the market to cross that unless Europe opens positive and RBI doesn’t come as a big negative. In that case, Nifty will move toward 10780. Otherwise, the 10650-10750 will be the range for the day and in that situation I suggest you to observe for RBI meet closely and see how Europe opens. If you get a dip to 10700 levels and if Nifty stays above 10680 then take a long position with 10750-10780 as the target. You can see that there are a lot of conditions for the trade today, so trade carefully watching every move.