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Market Trade Setup 1st November #NIFTY

Market Trade Setup 1st November

November starts on a very good note. The worries of RBI have been temporarily put to rest. A storm in the tea cup caused mainly by media has taken away 100 points and added 200 points to Nifty by the end of the day. As we step into the winter month of November, things are looking up but how long will it stay needs to be seen. Dow Jones closed more than 240 points up last night adding more than 650 points in last two days and today morning Asia is looking green with Hong Kong up by 400 points and so there is no worry for Nifty. Adding to this is the fall in Brent Crude will be furthermore positive to India. Brent Crude is now below 75 dollars trading at 74.7 dollars.

Coming to domestics, its the Q2 results are in the forefront now. L&T declared fantastic Q2 numbers, putting rest to any problems in the engineering and construction sector. Added to this are the positive numbers from ABB another engineering company which gave good results. On the banking front, Canara bank declared good results and nicely followed up Bank of Baroda which also declared good numbers. Added to this is the news of ease of doing business report that came yesterday showed India jumping 23 places to reach 77th place from 100th place. 6 out of 10 indicators have shown improvement with construction permits showing the maximum jump. The worst performing indicator was however tax payments.

Another fundamental that we face is the October Auto sales numbers coming today and tomorrow. 4 wheelers are set to drop their growth due to subdued festival demand. The main reason is the late start to festival month this year. Added to this is the high petrol and diesel prices which reduced the demand. The passenger cars segment is likely to show a low growth of 4% while two wheeler sector is expected to perform slightly better showing a 10% growth. Maruti is one company we need to closely look at as any drop in the sales will affect the stock price. Hero and TVS in 2 wheeler space will be in focus today, so is Eicher and everyone will look at the sales of Royal Enfield during festive month.

Following are the Q2 results expected today

1. Adlabs
2. Amrutanjan
3. Apollo Tyres
4. Bajaj Electricals
5. Berger paints
6. DLF
7. Godrej Properties
8. Hindustan Petroleum
9. Taj GVK
10. Tata Communications
11. Thomas cook holidays
12. Timex
13. Zuari cements

On the derivatives front, yesterday was a day when there was an all round buying when nothing happened on RBI front. The long positions on Nifty futures jumped from 32% to 34% during the mid day and the premium on futures also went up. The options market also showed bullishness with Nifty put call ratio jumping to all time high in this series of 1.55. 10300 put added 3.1 lakh contracts, 10200 put added 2.6 lakh contracts while 10400 put added 2.8 lakh contracts and 10000 put added 2.5 lakh contracts indicating that base is now getting built around 10000 and 10200 level. On the call side 10900 call added 3.6 lakh contracts.

What is the Nifty call for the day?

Lots of positive cues will make Nifty to open gap up above 10400 levels near 10410-10420 zone. I am looking at a positional call today because the risk reward might not work positively for an intra day trade. Yesterday’s intraday trade would have worked fantastically for you and at any point you would have got your 50 point profit. Today you could look for a dip towards 10400 during any part of the day and look for a positional target of 10500 to be achieved anytime in next few days. If you dont get an opportunity to enter today then I would advise patience. If Nifty closes below 10450 today you will still get a chance to enter the market tomorrow also. But dont take long positions beyond 10420 as the upside might be limited today.

Market Trade Setup 3rd September #Nifty

September starts on a note that it is known for. Septembers always have been cautious and no over-optimism or pessimism. That is why if you compare the last 3 years Septembers were always flat not getting carried away either by good news or bad news. Let’s hope that this September also behaves the same way. The US markets were flat on Friday and today they are shut on account of labor day so no big clues available. Asia is down on account of trade wars in Europe emerging slowly. Hong Kong is down more than 250 points and other markets were down anywhere between 0.5% to 1%. 

On the domestic front, the big news that will move the market today is the GDP number that came at 8.2% and the GVA number that came at 8%. For a 8% GVA if the tax collections were good then we would have seen a 8.3 to 8.4% GDP but 8.2% indicates lower tax collections which is a worrying point. Another worrying point is the drop in the services sector GDP has actually been lower than 8.2%. The good point is manufacturing that grew 13.8% and excellent numbers from construction and Agriculture that indicates that jobs are getting created in the unorganized sector.

The other domestics are the very good numbers that have come from the auto sales in August and this could be positive. Commercial vehicles grew very well led by Ashok Leyland reported 28% growth in commercial sales, Tata Motors commercial vehicles grew at 26% and M&M commercial vehicles sales went up 25%. Maruti, Hero and TVS saw a drop in sales due to Kerala floods. Now coming to the negative fundamentals its the strengthening dollar again where the dollar index crossed 95 and stands at 95.2 now. That means fresh pressure on Rupee and we might see Rupee tumbling to another all time low. On the other hand the Brent crude prices are still holding on and not showing signs of falling. They are still around 78 dollars per barrel.

Derivatives Action

On the derivatives front, the first day saw a massive short build-up in the Nifty futures and the percentage of Nifty long positions came down from 64% to 60%. On the options market also the shorts in the calls side is more than the shorts on the put side. But when it comes to longs, there were 2 puts bought for every call. The put call ratio now stands at 1.55. 11600 put added 7 lakh contracts and 11500 put added 5 lakh contracts and 11700 put added 3.1 lakh contracts. With this the 11600 put has the maximum accumulated open interest now and that means 11520 will be the new floor for the market in this series. On the call side 12000 call added 5 lakh contracts and 11800 call added 4.9 lakh contracts and 11800 still has the maximum accumulated open interest. At 100 rupee premium 11900 could be the new roof. 

What is the Nifty call for the day?

GDP numbers will make our markets open in green at 11700 levels and the long position you have taken on Friday at 11640-11660 will have a 40-60 point profit. First resistance might come t 11720-11740 zone and Nifty might correct to 11650 intraday after touching this level. So, it is better to exit the long positions as soon as 11720 is reached. The minimum profit you are guaranteed with is 50-60 points. As the market starts negotiating this positive and negative factors, stay out and see where it closes. Any close below 11680 is not good for the near term.

Market Trade Setup 30th August- Expiry Day Special #Nifty

Markets and News

Finally, the longest series is finally drawing to a close. A series that started with a lot of scepticism and worry is now coming to an end with most of the worries put behind and Nifty gained 4.6% in this series. So last two series has seen a gain of 1100 points on Nifty. July series has began at 10600 levels and today we are at 11700. This series started off on a all time high note when Nifty crossed 11170 high made previously on the first day itself. From then on it was an uptrend all the way as Nifty conquered 11200, 11300, 11400, 11500, 11600, 11700 and finally came to the summit level of 11750. Very rarely in a single series you will see these many all time highs.

On the fundamentals, there are some major worries to encounter today in the form of Rupee weakness and Brent Crude surging. The Rupee had a big fall yesterday and has seen crossing the 70.50 levels to go to as low as 70.65 to finally settle at 70.59. This is an all time lowest closing level for Rupee and now Rupee hitting 71 is imminent and coupled to that is the Crude now crossing 77 dollars and trading at 77.3 and this would mean huge pressure on the current account deficit. What impact all this will have on a expiry day needs to be seen.

Coming back to the expiry again, and it was 4-3 in the favour of bulls till July series. January, April, May and July went to bulls while February, March and June series went for bears. Now August series is on a 500 plus point gain and it is going to be 5-3 in favour of bulls now. The roll overs in the market is at 69% as on yesterday vs an average of 63%, Nifty roll overs were at 53% vs an average of 46%. The Nifty futures premium held on to 13 points and stayed above 11700 while Nifty spot came down below 11700 levels. So, F&O cues looks bullish.

On the Options market also, the high level of Nifty put call ratio which was 1.94 at the beginning of the day dropped to 1.84 at the end of the ay mainly due to unwinding of positions on the put side. 11700 put saw 11.2 lakh positions unwounded and 11600 put saw 4.1 lakh positions and 11500 put 4.6 positions was responsible for bringing down PCR. On the call side 11800 call has the maximum accumulated open interest of 31.8 lakh positions while 10750 call added maximum open interest of 10.9 lakh positions yesterday. 

What is the Nifty call for the day?

Yesterday’s options action shows that 11700 put has seen maximum shedding and today it might get a support there which means support will come to Nifty at 11680 levels on the down side and 11750 call added maximum open interest on call side and at 9 rupees premium 11760 is the roof for the market. Most probably the expiry might happen within these contours and if 11680 is broken the next support is at 11640 levels and 11600 levels. So, its the 3PM move that will decide whether these markers would be broken. You took 3 positions, all of them are making profits as of now and lets hope it stays that way at expiry. Good luck…..

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 3rd July #Nifty

Markets and News

A miserable Monday which saw Nifty falling 100 points before recovering a bit towards end and close nearly 60 points down. The same trend continued in US markets also where it fell by 200 points before recovering and closing in positive. Today, Asia is mixed with Hong Kong trading nearly 700 points down and this is the direct result of trade tensions and weakening Yuan. Yuan is now at 6.7 which is the lowest in last 11 months and its dangerously close to touching that 7 mark in next few days. Dollar index is again nearing 95 and that would put some pressure on Rupee as well.

Domestic Cues

On the domestics front, NPAs and stressed assets are in news as Govt has come up with 5 point NPA resolution plan which could be in place in next 6-9 months time. The weaker PSU banks will have some benefit. The Crude is stabilizing a bit, and has settled at 77.6 per dollar and that would mean some respite. But strengthening dollar might take the Rupee to 69 levels one more time today and that might bring back some worries in debt market. The core sector data for 8 industries came at 3.6% for May which is a 10 month low vs 4.6% seen in the previous month. Crude dropped to -2.9% and steel grew at just 0.5% and electricity at 3.5% were the main contributors to the fall.

Derivatives Action

On the derivatives front, there was a massive unwinding of longs as Nifty fell yesterday and long positions in futures is back to 37% from 40%. The options market also started demand getting generated to calls with nifty put call ratio dropping to 1.45 from 1.48. 10700 put saw 1.6 lakh positions unwinding, while 10800 put saw 1.8 lakh positions unwinding as Nifty moved towards 10600. 10400 and 10500 puts saw 2.2 lakh positions each building up. Now accumulated open interest is moving towards 10500 from 10600 and at 80 rupees premium 10420 is building as a new floor to the market. On the call side 11000 call had 3.5 lakh positions and 11100 call 2.9 lakh positions built up to eat to 20 rupee and 10 rupee premium there.

What is the Nifty call for the day?

We might open positive today around 10680 levels which is the 50dma and whether it will cross that or not needs to be seen. The 20dma is 10750 and Nifty might spend some time in that range if it stays above 10680. Luckily you dont have any positions and it is better to wait and watch before rushing into any positions. If 10680 is not held and if it falls to 10650 then yesterday’s low of 10600 could be a support and that should be held. So wait and watch!!

Market Trade Setup 27th June #Nifty

Markets and Expiry

Penultimate day to the expiry and we have some worries back on the table. US markets have closed in a flat to positive zone but there was a lot of volatility before that close. Trade tensions, Crude are the most important worries globally today. US has arm twisted Europe and Japan to stop buying Crude from Iran and that has pushed the prices up for the Crude oil 3% overnight and right now Crude is at 76.5 dollars and with other factors also coming into play we are in for a rough period ahead. Asia is showing nervousness with all the Asian markets in marginal red.

Domestic Cues

Domestics are also not in great shape. Rupee has slid to a lowest level in a year at 68.24 and today with Crude also going up, the import bill will surely go up. There is one news that we need to take into account bit seriously and that is about Mallya. A lot is happening and if he is arrested in next few days and if he talks his mind then many politicians and companies might be in trouble. Otherwise its still the technical factors and expiry related cues that are going to drive the market for today and tomorrow.

Derivatives Action

On derivatives front, there was again a shift in the positions taken yesterday in the Futures and Options and the rollovers are also picking up. 27% are the rollovers till yesterday and we need to see how they go today and tomorrow. The options market saw action again on put side and the put call ratio jumped to 1.54 from 1.48 mainly on put shorting. 10650 put saw 7.2 lakh contracts build up which means that 10680 floor is getting lower to 10640 now. 10850 call saw 3.6 lakh contracts indicating that roof is still 10860 in case if there is any sharp surge in Nifty.

What is the Nifty call for the day?

A mild Asia means a flat opening for Nifty around 10760 and this 10700 to 10800 range might play out today with Nifty having legs to touch 10840 on the upside and 10660 on the down side. A short strangle that you can consider is 10750 which is at 80 rupees premium and that will protect you upto 10670 on downside and 10830 on the upside. This trade can be taken and you will stand to benefit in 90% case as it looks difficult for Nifty to go beyond 10830 or below 10670.

Market Trade Setup 21st June #Nifty

Market Setup
Longest day of the year, the summer solstice is here and also the International yoga day. Things are looking stable in US last night with Dow losing marginally but the S&P and NASDAQ have picked up a bit momentum. Asia is in a very positive zone today with Hong Kong and Japan are up nearly 200 points now. The dollar index is a worry that is still above 95 and going towards 95.50. Rupee closed above 68 yesterday and that might continue today.
Domestic Cues
Coming to the domestics, there are no big fundamentals affecting the markets except the Crude which has again dropped over a dollar to go to 74.6 dollars. That will boost many sectors. The F&O market saw some selling in the futures market saw a lot of sell of and a drop in long positions was seen. The options saw 10700 put creating 5.7 lakh fresh contracts and that makes 10650 again a firm support. On the call side lot of positions were unwound and 11000 call holds the maximum accumulated open interest.
What is the Nifty call for the day?
Nifty will open slightly on the higher side because of the Asian markets and might touch 10800 at the beginning itself. 10850 will be a resistance. You have already met your target for yesterday and pocketed the profit. Today is to hold on the other position you have for 10930 as the target. There is still a week left for expiry and the target can be achieved.

Investments for Calendar Year 2018

Hello and welcome to the Sriram’s Portfolio Show!

Exactly about a year ago or to be precise 366 days ago on 8th January 2017 I have given 17 stocks to invest to earn minimum 17% returns. In the last Tuesday post, I have given the report card of those 17 stocks and the average returns of the portfolio were seen at 74%. Which means the portfolio was able to make 4.35 times of promised 17% returns. Well, its history now and time to talk about future.

Future is here, and India’s growth is clear!

Today am ready with 18 stocks in 2018 which will give you 18% returns and 2% extra to pay off your brokerage charges. So, overall the list of 18 stocks I am going to give will ripe 20% profits by end of the year 2018. Stocks are attached as picture to this post. Following are the stocks and their targets.

  1. Indo Count – A textile company which is weaving growth for 25 years and continuing strongly. Stock Price 125                         Target Price 150

 

  1. Gujarat Minerals – Major Lignite mineral supplier in the country hailing from Ahmedabad.

Stock Price 168                  Target 198

  1. Jet Airways – Flying high since last year and will continue to do so!

Stock Price 837                  Target 1010

  1. Escorts – The Farmer’s Choice!

Stock Price 795                  Target 945

  1. Reliance Capital – Anil Ambani’s Capital is up for Big returns!

Stock Price 604                  Target 720

  1. Yes Bank – Only one word and that is ‘YES’

Stock Price 340                  Target 405

  1. PFC – The Backbone for the growth of India’s power sector!

Stock Price 126                  Target 152

  1. Heidelberg Cements – A public limited company established under Germans and is growing big!

Stock Price 164                  Target 197

  1. Ambuja Cements – Asia’s biggest cement producing company is up for returns!

Stock Price 277                  Target 335

  1. Jindal Steel – Any cement company is useless without the Steel and its Jindal Steel!

Stock Price 248                  Target 290

  1. Infosys – Salil Parekh is up for rescue and bring back the glory!

Stock Price 1041                Target 1250

  1. Bata – Tera shoe Batha – Haan BATA hai!

Stock Price 745                  Target 880

  1. Dabur – If any Ayurveda is to be believed then believe in Dabur.

Stock Price 360                  Target 433

  1. Voltas – Now you complain of cool climate but very you soon you run behind Voltas!

Stock Price 648                  Target 778

  1. MRPL – ONGC’s obedient child is up for knocking big this time!

Stock Price 132                  Target 157

  1. Reliance Industries – One of the most important stock in India’s Stock Market growth!

Stock Price 940                  Target 1128

  1. Airtel – Though its colored red it’s the evergreen telecom company!

Stock Price 510                  Target 602

  1. Granules India – Apna Hyderbadi patta!

Stock Price 140                  Target 168

Just invest, relax and look at your portfolio when the targets are achieved!! Reap the profits, Keep investing!!!

Market Setup 29th December

Markets and Mornings!

After the last expiry of the year yesterday we are now welcoming the last trading day of the year. Today is Friday and we are starting the January series on the last trading day of the year. We are starting without any big fundamentals affecting the market. The only fundamental that can affect Reliance group of stocks is Mukesh and Anil Ambani coming together again and Mukesh coming in to buy the wireless business of Relcomm by Jio. Jio in a way will bail out Rel comm and that could bring down the debt of Relcomm by 25,000 Crore. In other ways, holiday mood has set in and people will flock to holiday destinations and today we could see the lowest volumes in the year.

Futures and Options!

On the derivatives front, January series will start with 65% roll overs and maximum change in the open interest is observed at 10700 and 11000 calls. 10700 call had 10.69 lakh contracts created while 11000 call had a record 12.1 lakh contracts created. 11000 call is at 8 rupees premium and that means January can see NIFTY touching 11000 at some point. The first stop however is the 10750 where it might encounter a lot of resistance. But all these are mere speculations looking at the options data. On the put side maximum change in the open interest is at 10200 and 10300 put suggesting that 10150 is a strong bottom which cannot be easily taken out. In short January series might move between 10150 and 10750 range and right now we are exactly at the middle. If 10750 is taken out then the journey towards 11000 will start.

What is the NIFTY strategy for the day?

Yesterday would have given you a 50 point profit and that is the result of different positions we took this week. Now its a new day and the new series. NIFTY will open flat again close to 10500 level and I would advise taking a long position below 10480 and take it into new year. There are no negative cues and January 1st is a working day for markets. So on the New year day it will make some bullish moves and taking the positions today below 10500 or around 10500 will help you to start 2018 on a real winning note! Good luck and this is the last post of mine in 2017. I will see you again in 2018 with lot of good news and lot of money to be made in the markets!