Tag Archives: Market Setup

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 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 point 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 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. Lets see how these two stocks react today.  On the technical side we have crossed the 100 day moving average of 10690 yesterday and next we have the 20 and 50 day moving 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 means 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 doesnt 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.

Market Trade Setup 25th January #Nifty

Market Trade Setup 25th January

The focus is now shifting more and more towards local factors than global factors. Globally, US is on 24-day shut down now and its priced in. The trade negotiations are still going between US and China on trade and Brent Crude is hovering around 60-63 dollars and its bouncing back whenever it touches 60 dollars. The latest is the sanctions on Venezuela by the US, and I feel pity for that country. In the last 4 years the GDP fell by -51% and inflation is at 1200% and I don’t know how a country can survive in these conditions. Back to markets, US was flat and Asian markets are in green with Hong Kong 350 points up and Japan is up 200 points. 

Coming to domestics, Yes bank is the news with Ranveet Gill being appointed the new MD & CEO. The stock has jumped over 10% in the last 30 minutes of the trade and this could be the beginning of the good tidings for Yes bank. Another important trigger is the Supreme Court judgement today around 10.30AM on the bankruptcy code. The market will watch it very closely. Today is again an important day for Q3 results and following are the Q3 results expected today: Gati, Gruh Finance, L&T, M&M Finance, Maruti Suzuki, Saregama and Vakrangee. So, L&T and Maruti is something that market will be closely watching today. Brent Crude is now is on its way towards 62 dollars. 

On the derivatives front, there was a lot of selling and now the overall long positions stand at 45% in Nifty Futures. There was an equal push from puts and calls in the options market and the Nifty put-call ratio remained at 1.43. There was a lot of action on 10800 put where 4 lakh fresh positions were added and at 50 rupees premium traders believe that this series, it will not break 10750 mark. 10800 put as I predicted at the beginning of the series now has maximum open interest of 36 lakh positions followed by 10700 put at 31.1 lakh positions. On the call side 11000 call firmly stood the test of the time and has the maximum open interest at 43.8 lakh positions. 10900 call is next at 36 lakh positions. 

What is the Nifty call for the day?

If you remember, yesterday I asked you to take a long position if Nifty holds 10780-10800 range and asked you to take that position to the next day if those positions don’t meet the target. I asked you to take long at 10820-10850 with 10900 as the target. Today Nifty went all the way till 10860. Today, due to green Asia, we will have a gap up opening around 10880-10900 levels. Your targets will be met. As soon as they are met just exit with profits ranging from 50 to 80 points. 10920-10950 is a resistance zone and you might not get anything positive till Nifty crosses that. So, book profits and go celebrate the Republic Day tomorrow!

Market Trade Setup 22nd January India #Nifty

Market Trade Setup 22nd January 2019

Look at the way Nifty is crawling for last few days! A week ago Nifty was around 10800 and in last 5 to 7 trading sessions step by step, slowly Nifty crawled its way to 10950 mark. In the process it has slowly overcome first the 10820-10850 resistance and then 10920 resistance. Both took a lot of effort and now its closed above 10950. So, what will happen now? Will Nifty now touch 11,000 and go on from there? Will there be a post-budget rally that will take Nifty to 11500-11800 levels just before we kick off the 2019 elections? All this look more speculative and far fetched but for now, there are some immediate fears that we have to deal with.

The first issue to deal with is UK Prime Minister Theresa May comes out with her Plan B and says that there wont be any other referendum on the Brexit. The other news is the IMF coming up with the global GDP forecast for 2019 which is expected to be at 3.5% vs 3.7% seen in 2018. So, a slowdown is indicated globally which is always a worrying point. The Chinese GDP data has already confirmed that. Most of the Asian markets today are in the red on this report and the Crude is also trading in 62 dollar mark for last 2 days and now we are seeing the petrol prices going up again. After reaching the lowest rate in 15 months of 72.44 rupees, Petrol price in Hyderabad is now at 75.61.

On the derivatives front, yesterday’s rapid 50 plus point move the premium has more than halved from 20 points to 8 points. Last time when such a thing happened, next day market corrected almost 80 points. Are we going to see a similar correction today? The options data is not giving a clear picture and options traders are still figuring out where Nifty might go. The put-call ratio went up marginally from 1.56 to 1.59. 10900 put added 6.3 lakh contracts while 11000 put also added 5.4 lakh contracts. 10700 has the highest open interest and the gap between 10500 and 10700 put gradually increasing. On call side, 11000 call still has the highest open interest. 

What is the Nifty call for the day?

Yesterday I asked you to take a position between 10900-10920 with a target of 10980 and yesterday Nifty went up to 10987. So, you would have made a 60-80 point profit minimum. Today is not as lucky as yesterday. A red Asia means we will open bit flat around 10930-10950 levels and what happens after that needs to be seen. Watch out carefully, if Nifty is weak, stay away. If 10900 is broken then stay away from the trade. If you have still been holding positions of yesterday then exit as soon as the market shows growth. No fresh trades today.

Market Trade Setup 7th January #Nifty

Market Setup 7th January

The second week of the January kicks off on a fantastic note today and the worries of the previous week are put to rest for now. Dow had a delayed New Year rally of 746 points and that is a great news and momentum builder for the other markets. This is on the back of more than expected jobs created in the US. Out of 1,76,000 jobs, US weekly jobs data reported 3,10,000 jobs and that gave a positive indication on the growth. The trend has picked on in Asia and all the Asian markets are trading more than 1% up today. Nikkei is up 400 points, Hong Kong is up 550 points. The only bad news, however, is the Brent Crude touching 58 dollars and now the Petrol price cuts are well and truly over. Rupee also recovered on Friday and again we are below 70 per dollar. 

On the domestic front, there are fresh Fundamentals starting this week and they are the Q3 results. After bad Q2 results, there are a lot of expectations on Q3 results and we are going to start the results season with IndusInd bank starting off on 9th January and on 10th we have TCS coming up with their Q3 followed by Infosys on 11th. Apart from Q3 results this week also will have the IIP numbers for November and CPI inflation numbers for December. These numbers will give us a peek into what the Q3 GDP figures are going to be and also on the credit policy of RBI scheduled for next month.  Apart from these, there is a rumour of the big farm package that can come at anytime this week. This will have a big negative impact on bond markets and that might affect the equities also. 

On the derivatives front, Friday saw a mixed action on both Futures and options positions. The long positions on the Nifty futures remained steady at 48% while the Nifty put-call ratio remained stagnant at 1.34. This is because of the fall in the morning and recovery in the afternoon. 10000 put added maximum open interest of 4.5 lakh positions followed by 10400 put which added 4.3 lakh positions. 10500 put still continues to have highest open interest at 40.5 lakh positions which means 10500 will act as support for any fall in the near term. On the call side, 11300 call added 7.1 lakh positions while 10700 call added 2.6 lakh positions. 11000 call still has highest open interest at 38.9 lakh positions and 11000 will be the resistance to conquer on the upside. 11200 is also close behind with 33.6 lakh positions. 

What is the Nifty call for the day?

I asked you to take a long position around 10650 levels and you would have taken it as per my advice. If you have taken, you will reap full benefit because Nifty will open gap up today and it might open around 10770-10800 level. I gave a target of 10750-10800 levels and these levels will be achieved as soon as you take the position. So, exit these positions when the target is reached and see where Nifty goes. 10830-10850 is resistance and see if Nifty can stay above and close above 10850. If it does then it’s a bullish sign. If Nifty goes back below 10750 after touching 10800 and stays and closes below 10750 then it’s a bearish sign and we need to trade a bit more cautiously. So, book profits and wait for my further call during the day before taking any more positions.