Tag Archives: Market Setup

Market Trade Setup 22nd April #Nifty

Last week of April and the expiry week is here. This week has some very important cues, one being the election and the noise of Rahul’s nomination, sexual harassment charges on CJI and its impact on the key judgments waiting to be delivered and the continuing Q4 results that will impact the companies. On Thursday, US markets closed in the positive territory up 110 points but that is very old news. Yesterday’s terror attacks in Sri Lanka where 200 people lost their lives has a major impact on the growth and stability across the World. Added to that are the worries of rising crude prices for India. Crude oil has crossed 73 dollars and its trading at 73.5 dollars now. Asia today is flat with some markets in a mild positive zone and some in a mild negative.
On the domestic front, the focus today will be the Q4 results of Reliance and HDFC that came on Friday evening and Saturday respectively. After many quarters Reliance has disappointed in its petrochemical business with margins disappointing and even Reliance Jio which was having a dream run till last quarter has seen a fall in growth in the number of subscribers, revenue as well as Average revenue per user. So, overall disappointment from Reliance. That disappointment was made up by HDFC which came up with very good numbers. Added to this we have plenty of news from Amethi, where scrutiny of nominations will take place today and the final decision on the AAP-Congress alliance in Delhi and Haryana will be taken today. Tomorrow is the 3rd phase polls as well as the last day for filing nominations for 6th phase, which includes Delhi.
On the derivatives front, we had the 3rd weekly expiry of the April month and it happened on a good volume and turnover of 21.63 lakh crore and that’s heartening. Now, the focus shifts to the April monthly series expiry which will happen this Thursday. Last Thursday we saw a heavy buying in Nifty futures which indicates that there could be some more upside that market saw on the day when 2nd phase polling was happening. We will have to see its impact going into this monthly expiry. The Nifty put-call ratio, however, came down from 1.82 levels to 1.71. 11400 put added 5.1 lakh positions, 11650 call added 2.3 lakh positions and 11600 call added 1.9 lakh positions and 11500 put still has highest open interest of 28.4 lakh positions. On the call side 11800 call added 6.9 lakh positions, 12000 call added 6.8 lakh positions and 11900 call added 5.2 lakh positions. 12000 call still has the highest open interest.
What is the Nifty call for the day?
After 3 day holiday, we are opening today and the opening might be a bit flat around 11730-11760 zone and 11720 is a support that will come. The 11670-11700 is a big support zone and should hold today. Also, a lot of open interest has come on Thursday for 12000 call and we need to see if it continues. If it does, then we can look at 11850 which is all time high being tested and even broken this week. That might take us to 12000 levels also. A lot, however, depends on the election related fundamentals and we need to look at them carefully. So, for today, I would suggest that if you get a dip around 11720 levels or below that, then go for a long position. If Nifty drops below 11670 mark before 10.30am today, then don’t take any positions. Any dip from 11670-11720 levels would be an opportunity to enter again with 11800 as the target. If you have previous positions then keep 11800 as a target to exit them.

Market Trade Setup 11th March #Nifty

Market Trade Setup 11th March
As expected, by the time we entered the 2nd week of March, we have the election dates with us and it’s going to be the nervous 10 weeks ahead with results coming on 23rd May. This news will have an impact on the market and we need to see which direction markets will move now. Globally things are not looking great to start the week with, as there was a disappointment in the jobs data coming from the US and that has put Dow Jones on a flat to negative territory but it was the Asia that started to react from the time Japan opened at 4 AM Indian time. But slowly it’s digesting the data and now almost all of Asia is in flat territory recovering from the opening lows. Brent Crude is still hovering in the range of 64-67 dollars trading at 65.8 dollars now.
Coming to domestics, the announcement that everyone was waiting for has finally come through and we have the announcement of dates for 2019 general elections is finally made. The elections will happen in 7 phases from 11th April to 19th May and the counting will happen on 23rd May. 11th April when the first phase starts is a Thursday and it is an expiry day for a weekly series and 23rd May when counting happens also is a Thursday and will have the 4th weekly expiry of a 5 week May series. We had hit the circuit markers in 2004 and 2009 election days and 2014 election day also saw huge volatility on counting day. So, we need to see how Nifty moves on 23rd May and how expiry will play out, wherein by that time the scenario will be more or less clear as to who will form the next Govt.
On derivatives front, Friday saw some selling in the Nifty futures and we have seen the long exposure in Nifty futures drop from 53% to 52%. On the options front, there was some more correction to Nifty put-call ratio and it’s fallen to 1.60 from 1.68 mark. Last Thursday saw PCR jumping to 1.80 mark. Friday saw Derivative markets cloaking 85.5 lakh contracts worth 5.39 lakh Crores. For the 14th March weekly expiry, 11000 put has the highest open interest of 15.5 lakh positions while 11200 call has a highest open interest at 10.7 lakh positions. So, 11000 put at 40 rupees premium will have the support coming in at 10960-10980 mark and the resistance goes up all the way up to 11210 mark. For monthly expiry, the support and resistance still continue to be at 11000 put and 11500 call. So, this week could take Nifty up to 11200 on the upside and for this month it could go up to 11500 and on the downside 11000 is the support for both.
What is the Nifty call for the day?

On Friday, we have taken positions at around 11020 levels and we are still at no profit no loss zone. Today Nifty will open at 11020-11040 levels and the support will come at 10980-11010 mark and that has the potential to take the Nifty to 11070-11100 mark and Nifty has to break that 11100 mark to go up further. Will the news of elections help Nifty to break that? We have to wait and see. But the moment Nifty reaches 11070-11100 mark it is better to close your long positions and wait for the next opportunity to re-enter. Today your targets might be met.

Market Trade Setup 26th February #Nifty

All the positivity that Nifty has created by going up the 20, 50 and 200dma and closed above them is gone today morning. Yesterday, we had Nifty moved ahead of all the three resistances and braced itself for 11000. So, 11000 was just a matter of time and in this series itself, we would have reached there. But today everything has changed. But before going to that, the US markets have closed on a positive territory up 60 points and today Asia was in green till the news of Indo-Pak tension surfaced. Brent crude which touched 67 dollars yesterday also has come down to 64.5 dollars after President Trump issuing a stern warning that the Crude prices were too high.
Coming to domestics, looks like the worst has happened. Something that India never did in the last 45 years seems to have happened last night and early morning today. It is reported that multiple Indian Airforce Jets have crossed the Line of Control and entered PoK and seems to have hit Jaish e Mohammad targets there. There is no information on the extent of the damage. Indian Airforce seems to have hit multiple targets along the Balakot area. Pakistan also has confirmed it and said that India has intruded its airspace. This had a telling impact on SGX Nifty which was 50 points up at 7.30am today and now at 8.10am, it is down 80 points, which means 130 points were lost in 40 minutes. All Asian markets have gone into India. This news will continue throughout the day and all this means uncertainty.
Coming to derivatives, the activity on Options is going up with the turnover of Derivatives to 6.2 lakh crores out of which 4.7 lakh crore came from the Index options. The demand for puts was more than calls and as the Nifty was going up yesterday and the Nifty put-call ratio went up to 1.46 from 1.36 seen at the beginning of the day. 10800 put added maximum open interest of 11.4 lakh and now 10800 is close to 10700 put in maximum open interest. 10700 put has 35.4 lakh positions while 10800 put has 34.2 lakh positions. On the call side, 11000 call still continues to have the highest open interest.
What is the Nifty call for the day?

Everything today depends on what kind of news we would get from border and what steps Govt takes all through the day and the kind of statements it make. Pakistan is already active and tweeting that they were able to scramble Indian jets and they are going back. Today we would open 80-100 points down as of now and that means we will be at 10800-10820 mark and 10750 might be the support on the downside. Today there is no trade and just watch what happens at the border so that we can decide about the trade tomorrow.

Market Trade Setup 21st February

After 8 days of continues fall, finally we saw a sharp rally yesterday, especially in the last hour and what we saw was a 130 point rally that took Nifty above 10720 and closed at 10735. For the last 2 days, I was talking about Nifty conquering 10700-10720 mark and that finally happened yesterday. The options data from the weekly series of Nifty also indicated 10800 as the roof and we are going there. Globally things are looking fine with Dow Jones closing in 60 points positive zone but the Asian markets are trading in the mixed zone with Hong Kong in mild positive while China and Japan are in mild red. The bad news is on Brent crude which has climbed to 66.8 dollars and now a touching distance away from 67 dollars.

On the domestic front, the Pulwama news is digested, the people responsible were eliminated and the market seems to have put that news behind. The big news, however, is the PSU bank recapitalization that was announced and that has led a rally in many PSU banks with IDBI bank going up 3% and SBI, Canara Bank and Syndicate bank gaining between 2 to 2.5%. Corporation bank and Allahabad bank got the highest recapitalization of 9000 Cr and 6900 Cr respectively. Let’s see how these two stocks react today.  On the technical side we have crossed the 100 days moving an average of 10690 yesterday and next, we have the 20 and 50 days moving an average of 10820 and that will be a resistance point to watch out for.

On the derivative front, today is the weekly expiry for the Nifty and yesterday itself we have seen a lot of reaction with 9 lakh crore turnover on Index options and the overall derivative turnover of 10.1 lakh crore. We have to see if we can see another 20 lakh crore turnover or not today. 10600 put has the maximum open interest of 15.3 lakh positions and 10700 also has 11.9 lakh positions so today if we break 10690 by chance then we have the chances of going to 10620 mark. On the call side, 10800 is a firm resistance and that would be maintained at any cost. For the monthly expiry series the Nifty put-call ratio yesterday jumped from 1.11 to 1.30. I had indicated that there would be a rally, as the PCR has gone really low. 10400 put and 11000 call continue to have maximum open interest for the 28th Feb expiry.

What is the Nifty call for the day?

Yesterday, I was talking about a mild rally which can take Nifty to 10700-10720 mark and what we got was a rally that took Nifty to 10735 mark. If you had taken positions yesterday, you would have made mild profits and would have closed the positions yesterday. If you had not taken any position, strictly following my advice that 10650 was not reached, then no problem, today you will get an opportunity again. A mildly red Asia and rising Brent Crude prices mean we will open a bit down today around 10670-10690 mark and that presents you with a fresh opportunity to enter into a long position again. Make sure that Nifty doesn’t fall below 10650 mark till 10.30 then go long around 10680 mark with 10730-10750 as a target. If by any chance the target is not reached and Nifty stays above 10660-10680 mark then keep your positions intact and take it to tomorrow.

Market Trade Setup 18th February #NIFTY

Market Trade Setup 18th February

A nervous weekend comes to an end and we are back to the second half of this shortest expiry monthly series. Nervous on what will happen at the borders and nothing big has happened and that is the good news as well as bad news. Good news because we will still work on the other known cues to predict the markets and bad news because uncertainty and pressure will continue in the markets and so everything will be approached on a doubtful note. Meanwhile, the positive news on the US-China trade talks pushed up the US markets which rose by a massive 440 points. That rubbed off on the Asian markets also today and Hong Kong is up close to 500 points now and Japan is up 370 points and all the other Asian markets are trading in the green. 

On the domestic front, OPEC has further cut the crude production and that has pushed the crude oil from 65 dollars at the weekend to 66.2 dollars and that would be one of the reasons why Nifty might not go up as much as other markets today. Added to that we have the big domestic factor of Pulwama attacks where Govt has not taken any concrete steps against Pakistan except warning them, which will weigh on the minds of the markets. RBI has pulled up Yes bank for revealing the confidential letter that it sent them about the no divergence and it is nothing short of a breach of trust and confidentiality norms. Today you might see Yes bank stock in the pressure again. On the Q3 front, results season has almost ended and today Ambuja cement is only the major company up with their Q3. 

On the derivatives front, Friday saw a lot of short positions getting built on the Nifty Futures and with that, the overall long positions fell to 47% at the end of the day from 49% at the beginning of the day. On the options front also, the Nifty put-call ratio dropped to 1.30 from 1.35, even though markets recovered at the end of the day on Friday. 10400 put added maximum contracts of 2.6 lakh followed by 10500 put which added 2.4 lakh contracts and 10700 put 1.7 lakh contracts. All the other Strikes shed open interest. 10700 put has highest open interest at 32.1 lakh positions while 10400 put is close behind at 31.3 lakh contracts. So, any fall below 10700 today might take Nifty towards the 10400 mark and this is something that traders should closely observe. On the call side, 11000 call is acting as the roof to the market. 

What is the Nifty call for the day?

Despite a positive Asia, we might not open that positive today because of the crude and the domestic factors and we could see an opening between 10730-10760 mark with a maximum upside potential of 10780-10800. I had stopped you from taking any positions and Friday but on Thursday I asked you to go long at 10720 levels. If you had taken that position, today is the best time to exit. Exit this position anywhere between 10770-10790 levels and see what market does. On the down side 10620-10650 might act as a support to the market. Today is also a no trade day for me as we are going through a severe pressure from within for whatever positive factors that are occurring globally. If today Nifty closes above 10750 then we can look at some trades tomorrow.

Market Trade Setup 15th February 2019 #Nifty

A tough week is coming to an end with a very sad news coming from pulwama where 44 of our brave soldiers were martyred in a suicide attack of terrorists from across the border. India has promised a befitting reply at a place and time of its choosing. This brings a lot of uncertainty into the market which will be worried about the kind of reaction and its consequences. Globally also things are not looking good where growth fears are back again and Dow Jones lost 100 plus points last night. Asian markets are in red with Hong Kong down 400 points, Japan down 250 points, Shanghai and Korea in mild red and only Taiwan in flat to green. Brent crude is also a cause of worry which is now at 65 dollars which in a week gained 4 dollars. 

Domestically, Yes bank was a star performer yesterday with a largest ever intraday gain for itself of 31%. Imagine a stock going up 31% on a single day, that’s what one clean chit from RBI can do. Another positive we can look forward to is the Jet Airways restructuring plan. Finally a restructuring plan seems to have worked out where the majority of 51% of stake in Jet will be held by the promotors and Naresh Goyal whose stake is 51.5% now is like to come down to 25% and Etihad which has 24% stake is likely to come down to 12%. Q3 results seem to be mixed with Nestle disappointing again, for Nestle which follows calendar year its Q4 results. Pharma company Glenmark was a relief which reported 11% rise in sales while MTNL, Jet Airways, Voltas were a disappointment. 

On the derivatives front, yesterday was Nifty weekly expiry and there was so much selling yesterday even in the monthly series that the long positions which were at 55% came down to 49% by evening. This is something which is very rare. Contrary the Put call ratio went up to 1.35 from 1.29 on the back of short put positions that got created. The first weekly expiry on Nifty and Bank Nifty clocked 15.89 lakh Crore turnover which is almost equal to the monthly expiries. So, the expectations that volumes will go up has actually come true. 10600 put added 3.8 lakh contracts and 10700 put added 3.5 lakh positions and 10700 put now has the highest open interest which means 10630-10650 is the support for this month. On the call side 10800 call added 8.2 lakh positions and 11000 call has the maximum open interest. 

What is the Nifty call for the day?

Today is Friday and the cues across the globe are not that good. Even the domestic situation is challenging with market worrying what kind of retaliatory action India will come up with in pulwama. Brent crude also is at 65 dollars and all that means we will open in 10740-10760 range and we need to see if 10750 holds or not. If 10720-10750 doesnt hold and Nifty slips below that before 12 then its a warning sign to stay off. I know that you have not traded for almost a week but these are testing times and we need to hold on and wait for the right opportunity. If by 3PM also Nifty manages to hold 10720-10750 then you can venture into taking a long position, but remember that a lot can happen over the weekend in Kashmir which will have an impact when we open again on Monday. So, its all looking very risky indeed.

Market Trade Setup 11th February 2019 #NIFTY

Market Trade Setup 11th February 2019 #NIFTY

We are back to the 2nd week of this shortest month after a big 125 point fall on Friday, erasing almost all the gains made during the week. This week starts off with a big warning from IMF Chief Christine Laggard saying “When there are too many clouds it takes one lighting for the storm to commence”. Added to that fact state, an economic monitoring agency has forecasted a contract of earnings of more than 1% in the 1st quarter of 2019. All that has started to impact the market and the US-China trade talks not going anywhere, there is dullness all over. Most of the Asian markets that were shut for one full week on the back of Lunar new year of China have opened today and are trading mixed. 

Coming to domestics, there was a big fall on Friday on the back of disappointing news from the Q3 front. Tata Motors was a big disappointment and things are looking very bad for many companies. Debt has become a bad word today and any company which has more debt than it can manage is seen collapsing. The classic example is the pack of ADAG stocks and stocks like Escorts, Tata Steel, M&M etc. Almost all the auto stocks have cut their guidance and this spells doom to the automobile sector. The Q3 results are in its last stage and following are results expected today: Amararaja batteries, Andhra bank, Century textiles, Eicher Motors, Hindustan copper, Max retail, Motherson Sumi, Spicejet and Virinchi.

On the derivatives front, there was a huge selling in the Nifty futures on Friday and that took the overall long positions to under 50% again and now they are at 49%. On the options front also, lots of short positions were unwound on put side taking the Nifty put-call ratio to 1.59 from 1.82. 11000 put shed 7.3 lakh positions while 10900 lost 7.2 lakh positions and 10500 put lost 6.4 lakh contracts. 10400 now has the highest open interest which is scary. 10700 is close behind it. On the call side, 11000 call added 6.7 lakh positions and it has the highest open interest. Another news is weekly options will kick off from today and Nifty and from today we will have the first weekly options opening for 14th February.

What is the Nifty call for the day?

This is a very uncertain market and Friday’s fall has established that strongly. I cautioned you from trading on Friday and am sure you would be feeling happy about your money being in your pocket. Looks like even today you have to keep your money in your pocket itself. Nifty is likely to open around 10920-10950 zone which is the previous resistance and now support. We need to see if that is taken as a support and move up. Even if it does 10980 is another resistance and we need to see where the Nifty closes. If Nifty closes above 11000 then we can have fresh trade opportunities from tomorrow. Else, it’s going to be another long wait for an opportunity to emerge.

Market Trade Setup 8th February 2019 #Nifty

Market Trade Setup 8th February 2019

Yesterday’s 25 basis point rate cut by RBI had triggered a short term rally that took Nifty to 11,120 mark but it couldn’t sustain. You wouldn’t have had any chance to take a position as Nifty was always close to 11,100 mark from the time it opened. So, no positions would’ve been taken yesterday. The USA markets were negative with Dow closing 220 points lower and NASDAQ nearly 100 points down. Today Asian markets are trading mixed with Japan and Hong Kong down 350 points each, while China and Singapore are trading in mild green. Brent crude has fallen below $62 and is trading at $61.4 now which is a positive sign for India.

Coming to domestics yesterday’s monetary policy has evoked mixed reactions where there was a 25 basis point rate cut bringing down the repo rate to 6.25% and MSF and Bank Rate to 6.5%. The inflation forecast was also lowered to under 3% for first half of 2019 and the tone of the policy was also changed to neutral from calibrated tightening. Though markets liked it initially, it couldn’t sustain as there were some growth concerns with services inflation still at 5.8%. So this 6.5% Bank Rate would effectively yield 70 basis points margin for banks which is much lower compared to 125 to 150 points margin kept during the Rajan’s time.

Coming to derivatives there was a mild buying seen in futures market where the overall long positions still stand at 52%. On the options side the Nifty put-call ratio has come down to 1.78 from 1.83 seen at the beginning of the day. On the put side 11,000 put added maximum open interest of 5.3 lakh positions followed by 11,200 put which added 4.2 lakh positions. From 10,700 the floor for the market has shifted to 11,000. 10,700 now has the second highest open interest. On the call side 11,400 call added 4.2 lakh positions and 11,500 call added 3.7 lakh positions. 11,000 call still has the open interest but there is a lot of open interest building at 11,400 and 11,200 which might emerge as the roof going forward.

What is the Nifty call for the Day?

Yesterday there was no chance to take any positions and today Nifty might open slightly gap down between 11,030 to 11,060. On the downside 10,980 is a big support and it might face resistance at 11,080 to 11,100. Today is the last day of the week and some profit booking is expected at any time. So, I would advise to stay out from Trading and look at the Nifty from a fresh point of view as we get into the second half of the series on Monday.

Market Trade Setup 28th January #Nifty

Market Setup 28th January

The 5th week and the expiry week has begun and we are where we were at the beginning of the series. We have not moved anywhere during these 4 weeks and these last 4 days might not be much of a difference. US markets are on positive territory with Dow gaining for the 5th straight week and on Friday it closed up 180 plus points in green. The promise of an end to the shut down seems to have added a positive trigger to the US markets. Today Asian markets are in green, except Japan and most of them are trading with a 0.5% gain with Hong Kong up by 170 points and Japan is the only market which is down 60 points. Brent Crude has settled itself and its trading at 61.5 dollars. 

On the domestic front, there are problems with ICICI. CBI has raided Chanda Kochhar and her husband along with the Videocon offices and that will have a negative impact on ICICI. The main problem is even the present management of ICICI is named in the scandal of giving undue loans to Videocon for them helping Chanda Kochhar. Apart from that Zee also has some problems as Subash chandra is trying to find a majority stake holder to offload his stake in Zee. Q3 results continue to pour in and so far its mixed bag. Following are the Q3 results expected today: Bank of India, Canara bank, Chennai petro, Godrej properties, Escorts, Radio city, RBL bank, Tata power, TTK, Wockhardt pharma. 

On the derivatives front, the action has now firmly shifted to options from Futures. The Nifty put call ratio fell further to 1.37 from the 1.43 mark where it began on Friday. The turnover in the Index options market was 5.53 lakh crore and that takes the overall F&O turnover to 7.24 lakh crore. On Friday, every strike on put side has unwinding of open interest and we saw 4.1 lakh shares unwinding, followed by 10800 put which unwound 3.3 lakh contracts. Still 10800 put has the highest open interest followed by 10700 put. On the call side 10800 call added 8.2 lakh positions while 10900 call added 7.2 lakh positions. 11000 has the highest open interest followed by 10900 call

What is the Nifty call for the day?

Today, I caution you from trading and I know Monday morning not trading is not a great thing to do. Nifty is at 10780 and its likely to open in that band only between 10780-10800 zone and 10820-10840 is the 20 and 200dma and crossing that is going to be very tough. The downside is also not opening up with 10720-10740 offering a great support for Nifty. In such a scenario I would ask you to wait and watch and if during the course of the day any possibility of an options strategy opens up, I would tweet the same. We need to see if 10820-10840 will be taken out or not easily. Till then no point in going long or short.