Tag Archives: Nifty

All the Stock market-related news, updates, concerns, strategies and the market outlook for the day.

Market Trade Setup 14th December #Nifty

Market Setup 14th December

After three good days, looks like markets are back into correction mode today. Today also is the end of the 2nd week and we are done with half of December. Come 17th we get into year ending mood and new year and things will be very different from what they are till now. So, today is the last day of the first half of the month and observing the trends is very important. The US has closed flat with Dow Jones gaining 70 odd points after going down nearly 200 points. Asia is in a red zone today as the trade wars intensify between the US and China and that would mean we will also have some impact at least in the way we open. Hong Kong is down 400 points and Japan is down 300 points as of now.  The Brent Crude prices are slowly inching up and have reached 61 dollars and that has to be watched closely.

Coming to domestics, things are settling down on the fundamentals but there is one event that will have some impact on the market and that is the RBI board meeting that remained inconclusive on 19th November. The meeting will start with Shaktikanta Das as the Governor and this meeting is likely to be less stormy than the previous one. The only dissenting member could be Viral Acharya and how much noise he makes needs to be seen. Crucial decisions on PSU bank recap, NBFC management and liquidity issues might be discussed in the meeting today. Another fundamental that could have The impact today is the Supreme Court judgement on Rafael deal. A bench headed by CJI will pronounce the verdict on whether there should be a the probe in the Rafael deal or not. This is a very important event for the image of the Govt. 

On the derivatives front, there was so much of selling in the Futures market that the overall long positions fell to as low as 43% by Wednesday. But yesterday saw a lot of reversal in that and the Nifty futures long positions jumped to 47% though Nifty moved by little over 50 points. In the options market also there was some bullishness and the Nifty put-call ratio jumped to 1.53 from 1.47. 10800 put added 13 lakh positions on a single day and that is surprising. Beyond that there was not much addition on the put side. 10000 put still continues to have maximum open interest of 51.7 lakh positions. On the call side, 10900 call added 6.7 lakh position while 11000 call added 5.8 lakh positions and 11000 call continues to have the highest open interest of 49.4 lakh positions on the call side.

What is the Nifty call for the day?

If you had taken a long position at the dip in the morning to 10780 as suggested you would have made your 40-50 point profit when Nifty reached 10830-10835 levels. After that profit taking has brought back Nifty to sub 10800 levels and today due to weak Asia we might open a bit down below 10750 mark around 10720 zone. After that we need to see which direction it does. If Nifty takes support at 10700 level and stays above you can stay out of the trade as I don’t see a lot of reward for the risk that you are taking. But if there is a drop below 10680 levels then it is the right time to go for a long position above 10650 and below 10680 levels and look for 10750 as the target to be achieved.

Market Trade Setup 13th December #Nifty

Market Setup 13th December

When you wait patiently the reward will be bound to come. The market has been continuously rewarding you more than expected for last 2 days and even the positions taken above 10700 level at the beginning of the series are also making profits now. So, now we are at a situation where none of our positions are making losses and we have come out of all the problems. Global markets are also cheering up after sulking on growth fears and Dow Jones was up another 150 points last night and other indices like S&P 500 and NASDAQ were all in the green. The Asian markets are also following the trend and Hong Kong is up another 300 points Japan is up 200 points and other Asian markets are up almost 1%. The best news continues for India with Brent Crude still at 60 dollars. 

Coming to domestics, the dust has settled down on elections and suddenly 0-3 loss for BJP doesn’t appear that way as Rajasthan and MP both threw up a hung assembly. Congress got 99 seats vs 73 of BJP and 101 is the majority mark. Similarly MP was even closer with 114 for Congress vs 109 of BJP where 116 was the majority mark. Another interesting point is BJP lost 5 seats with a margin of 500 votes and in fact BJP got more popular vote than Congress in MP so all this means it was a tight election and the hope is that things will reverse by April when we go for Lok Sabha polls and these states might swing in favour of BJP again has brought back the cheer back. Added to this is the new RBI governor who is looking more inclined towards Govt brought an end to Govt vs RBI tussle. 

Other big domestic news that could be very positive today is the CPI inflation data that came last evening. Inflation for the month of November came at just 2.3% vs 3.4% seen in October and 4.9% seen in the same month last year. Food inflation came at -2.6% vs +4.3% seen in the same month last year. Vegetables showed a -16% negative inflation, Sugar is -9% and pulses inflation also came at -9%. But the best news came from the services inflation or core inflation which came at 5.8% vs 6.2% seen in October. This means RBI can release liquidity now into the market without fearing the rise in inflation. The other good news is the IIP for October that came at 8.1% vs expected 5.5% and this is on the back of 7.9% growth in manufacturing. This means a good start to Q3 GDP.

What is the Nifty call for the day?

The options market has been showing a lot of positivity with Nifty put-call ratio surging to 1.47 from 1.33 and lots of puts are in demand. Asia is also green so we might also open green and might open close to 10780 levels. That might take us to 10850 levels intraday and on the downside 10720 is a big support. I would suggest taking a long position in the range of 10770-10800 levels with 40-60 points as the target. Understand that 10850 is the resistance and you can’t risk taking the positions beyond this level. The rally might come to an end today or Nifty might get stuck at this level unless the 10850 level is broken decisively.

Market Trade Setup 12th December #NIFTY

Market Setup 12th December

A sense of uneasiness prevails after a storm yesterday. A storm that swept BJP away from 3 states and to add to that we had an appointment of a Governor who is not a favourite person mainly on his credentials fit for an RBI governor. Globally things have become quiet and US markets have ended in a flat territory with a cut of 50 points and Asian markets are in the green territory with both Hong Kong and Japan up nearly 400 points. The Brent crude also has stabilized even though there were worries of escalation due to supply cut. Brent settled at 60 odd mark and it is trading at 60.7 dollars and the only worry is Rupee touching 72 per dollar and today is the day we have to watch out for on rupee front.

On the domestics, its 0-3 for BJP though the losses in two states were very narrow. Madhya Pradesh is almost a tie and still, we do not know who will form the Govt there. Congress emerged as the single largest party and with the support of SP and GGP are in a better position to form the Govt then BJP. This loss will have some impact on the market in the long term. The other big news is the appointment of Shaktikanta Das a retired IAS officer as the Governor of RBI. At the face of it, it looks like a horrible appointment as the Govt is looking at its convenience than the dynamics of running RBI as the major factor in the appointment. We will have to wait and watch what he will do. On the data front, IIP and CPI data is coming out today after the markets close.

On the derivatives front, we had a day that started on the low and steadily went up. But it didn’t help the long positions in the Futures market as they continue to be at 46%. We have created a scenario in this week where 54% of positions are short and at the beginning of the series we were 59% long and now it is just 46%. On the options front, there was some demand that has come on the put side with Nifty put-call ratio went up to 1.33 from 1.30 level. 10000 put added maximum open interest of 7.6 lakh positions, 10200 put added 6.8 lakh positions10400 put added 4.4 lakh positions. 10000 put has 53.1 lakh open positions and has the highest open interest followed by 10200 at 49.2 lakh positions. So, the base of the market moved from 10500 to 10000-10200 range. The call side open interest still remains at 11000 call

What is the Nifty call for the day?

A flat to slightly negative start is likely to happen today, as we get the news of Congress emerging as a single largest party in Madhya Pradesh. The open might be in 10510-10540 zone and from there we might see some volatility. 10480 will offer as a support and it is better to take a long position there with a 50 point target not exceeding 10550-10580 range. Yesterday I had spoken about a call buying and that has given you a handsome profit and today it is more to do with this minor trade on the long side. We will wait for things to settle down to look at further positions.

Market Trade Setup 11th December #NIFTY

Market setup 11th December

What started as global growth fear has escalated into a huge domestic scare with a series of events yesterday pulling Nifty down more than 200 points and we have cues today that can take markets another 200 points down or wipe out all the losses that we got yesterday. The US has finally recovered from the losses that were made till yesterday and closed almost flat. Asia is also in the flat to green just like the US market but India will not be bothered about all that. It will also not bothered about the fact that Brent Crude has reached 60 dollars per barrel. India will have its own fundamental and that fundamental is Urjit Patel and 5 state elections.
 
Coming to domestics, its the election results day and the exit polls suggest a 2-1 victory of Congress in 3 states and markets were factoring in 1-2 for Congress. A 3-0 win for Congress could result in another 200 point fall. A 3-0 win for BJP would mean all the losses that Nifty made yesterday will be wiped out.
 
So, you have a lot of volatility and a lot of things to look for. Added to this is Telangana where though BJP has nothing directly, but indirectly if TRS fails to get a majority then it could come in the picture as it has already offered to support TRS. Mizoram is the last Congress state standing and a loss here would mean we have a congress mukt Northeast. A 3-0 loss to Congress means we will almost have a Congress mukt Bharat except for Punjab and Karnataka where it’s in a fragile coalition. Urjit Patel resigning might be a news of the past and we will talk about it some other day.

 

What is the Nifty call for the day?

We cant even predict the open as everything depends on the election trends. As of now Congress is in lead in Rajasthan and Madhya Pradesh while Chattisgarh is going tight. This is just postal ballots so we cant conclude anything from this. I present two scenarios here. Scenario one where if Congress is sweeping the 3 states, wait for the reaction to get over and allow Nifty to fall another 200-300 points and look to enter with a long position then. The other scenario is where BJP is winning then you can enter into a long position quickly. You can wait for my updates as the election builds up. For now, just watch the results.

Market Trade Setup 10th December #NIFTY

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 #NIFTY

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 Trade Setup 6th December #NIFTY

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 Trade Setup 5th December #NIFTY

Market Setup 5th December

There was a huge scare that we woke up to. Dow Jones has plunged 800 points overnight. This is the worst fall for Dow Jones since 2011. This is coming on the back of the global growth scare. Added to that is the doubts that US-China trade truce might not last for long.

The main point is, why did Dow lose 800 points? The answer came from the flattening of the Yield curves of 2 yr, 5 yr and 10 yr bonds where the interest rates have narrowed so much that 5 yr yield fell below the 2 yr yield curve for the first time since 2007 and the spread between 2 year and 10 yr yield curves went to the narrowest of 11 bps for the first time in 10 years. This according to Rabo bank is the signs of the recession coming as soon as June 2020. All the Asian markets also are trading in negative on the back of this terrible news coming from the US.

On the domestics front, we have a different fundamental to deal with and that is going to the RBI credit policy which is going to come at 2.30pm today. Three factors are important here. First is what will happen to CRR, SLR and Repo rates. According to me, RBI will not touch CRR and Repo which are at 4% and 6.5% now but they can actually look at reducing the SLR, which is the money that can be parked by banks in Govt securities. This is at 19.5% now and RBI might bring it down to 18.5% to allow more liquidity in the market, which is what Govt wants now. Second is the tone of the policy, which might be changed to “neutral” from “calibrated tightening” and RBI might sound dovish in it statement. The Third is the inflation and growth projections. RBI might bring down its inflation forecast by upto 50 bps which is good and the growth forecast from 7.5% to 7.4%. 

On the derivatives front, there has been a lot of action seen in the Futures market both on the long side as well as short side. The options market has the Nifty put call ratio going up to 1.70 from 1.68. 10800 put added 2.8 lakh positions while 10600 put added 2.2 lakh positions. Still 10000 put continues to have the highest open interest while 10500 put is also picking up the open interest. On the call side 10900 call added 76,000 open interest and 11000 call still continues to have the highest open interest of 27.2 lakh and 11200 is also slowly picking up in the open interest. 

What is the Nifty call for the day?

The global growth scare will make the Nifty open today in the 10810-10840 range and what happens further needs to be seen. If you have taken positions yesterday around 10840 odd levels then wait for 10900 to be reached before closing positions. If you have not taken any positions, then wait for Nifty to stabilize at 10780 zone and go long with a 50 point target. Today’s monetary policy will add some volatility and use that to exit positions not enter. 

Market Trade Setup 4th December #NIFTY

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.