Tag Archives: nifty

Market Trade Setup 19th October #NIFTY

Market Trade Setup 19th October 

Last day of the week but not great way to start with. I had told you on Wednesday to exit your positions and you would have pocketed more than 140 points if you have closed your positions till 10am. What we saw on Wednesday was vertical fall from open of 10710 to 10450. This is more than 250 point fall. Yesterday we were not trading but there was a fall across Asia and that will surely be priced in today’s opening.  The Dow Jones fell more than 200 points yesterday on the back of news from Fed minutes that the interest rates cycle will continue and fed will keep rising the interest rates in future also. 

There were other bad news as well for the market with dollar index going up to 96 and that means rupee will again go back to 74 level today and might hit another all-time low. Added to that is the China GDP data for Q3 which came in at 6.5% which is the lowest we have seen in the last 9 years. Last time China had 6.5% GDP was in 2009 when World was going through investment banking crisis. The result is entire Asia is in negative. The only good news is Brent crude which is below 80 dollars now trading at 79.5 dollars.

On the domestic front bad news for China is good news for India and Chinese GDP drop might pull FII inflows into India. Crude below 80 dollars is also good for India so it is not such a bad scenario for India. The only negative for us is not so good Q3 results.  HUL though the numbers were good the margins disappointed. Same is the case with Reliance which also showed some margins pressure and ACC cements also was not upto the mark. So if today’s results disappoint things might be under pressure otherwise things are not as bad as they look.

On the derivatives front was a massive selling that happened on Wednesday with NIFTY started to fall. The NIFTY premium which was at 5 points at the open ended into a discount of 10 points by the end of the day. The story is clear. A lot of bearish positions were built on Wednesday and a gapdown today means a lot of short covering that can be seen. On the options front the NIFTY put call ratio dropped to 1.11 from 1.20 on the back of increasing demand for calls. 10000 put and 11000 calls still stand as markers but expect that to change today.

What is the Nifty call for the day?

A gap down is expected and if nifty opens below 10400 then expect a short covering for all those positions taken on Wednesday which might take the market past 10500 and even as high as 10580. Adverse news might make nifty test 10300 levels. A day like this is better to wait and watch than take any positions. Weekend is always a time for less risk so no positions for today.

Market Trade Setup 27th September #Nifty

Finally we are at the expiry day for a series that has been the second worst series in this year so far after the February series. As of now Nifty lost 620 points and February series lost 683 points and if Nifty loses 63 points today then we are looking at the worst series of the year. Global cues for the expiry is looking mixed with Fed hiking the interest rates by 25 bases points from 2% to 2.25%. That meant Dow lost 100 points in trade and much of Asia is looking green as this rate hike was already accounted for and there was no surprise.

On the domestic front, Rupee has been a bit stable with Rupee closing at 72.60 and but Crude is still at 82.2 which is very high but what will play out today are the expiry factors. As said before this series has lost 620 points so far and this series is going to the bears. So far for 8 months in this year 5 series went for bulls and 3 went for bears. No, it will be 5-4 for bulls and its a close race again. All eyes will now be on the 3PM move as to which direction it will come and with contrasting positions taken in the first and second half it is next to impossible to predict the direction of the 3PM move today. 

On the derivatives front, there was a rapid demand for the calls that got created yesterday as Nifty started to correct after the open and 11200 call added 11.3 lakh positions all, shorts and that took away 17 rupees premium from 22 rupees it had. Apart from that 11100 call as well as 11050 call were also sold with 5.2 lakh contracts generating for each strike. That brought the Nifty put call ratio to 1.09 which is also the second lowest after the February series. Now 11200 is the firm resistance for Nifty and breaking that is looking tough. On the downside 11000 is the support and at 30 rupees premium 10970 is the floor for the market. 

What is the Nifty call for the day?

We are looking at a slightly positive opening today at 11100 mark which is right at the center of 11200 and 11000 mark where open interests are hedged. We could see Nifty moving on either side and expiry will happen within this broad range of 200 points and that presents us some opportunity to take some short positions on the call side. The exact strike the timing will be tweeted after the markets open. You already have a short straddle at 11100 and that is in the profits giving you 125 rupees premium. So, sit back and enjoy the profits.

Market Trade Setup 24th September #Nifty

Market Trade Setup 24th September

The expiry week is here for the September series. This could be the most dangerous expiry week I have seen in last 2 years. I am not saying that because there will be a fall, am saying this because of the way market fell and recovered on Friday. That opened up the volatility and high volatility on expiry week is something which is dangerous. Last 3 series saw a 1200 point gain of Nifty and with Friday’s low of 10860 levels means we have corrected 61.8% at 11000 levels and Nifty has moved above that level now. The risk now is will this hold or are we going to see Nifty test 11000 another time?

Globally things are not looking that fine, with Dow Jones closing almost flat and most of the Asian markets are in red. Hong Kong is down more than 300 points and the other Asian markets are also trending in negative. The Brent Crude is worsening now and its almost at 80 dollars level now. On the domestic front however the DHLF crisis seems to have temporarily settled with management saying that all is well now but I&FS is in deep trouble and resignations are happening at the top. All this will have some impact on the market today.

On the derivatives front also, bearishness seems to have gripped the market. The Nifty premium for futures is dropping rapidly and the focus has shifted to Options on Friday itself as many traders went on a buying spree. Lot of put buying was seen on Friday where 5 puts were bought for every 2 calls and when it comes to shorting the scenario is reversed. 5 calls sold for every 2 puts sold and that kept the Nifty put call ratio unchanged at 1.14. 11000 put and 11500 call still continues to have highest accumulated open interest triggering volatility in the market.

What is the Nifty call for the day?

Friday saw almost a 400 point swing on the Nifty and today it will be another flat to negative opening around 11100 levels and 11000 is the support for the market for any drop. On the upside the market can touch 11180 levels and that might present a resistance. We are in a clueless zone now and I feel we need to see the market for sometime before venturing into any positions. This is a very volatile market and one needs to establish the direction clearly before going for any positions.

Market Trade Setup 21st September #Nifty

Market set up 21st September

The last day of the 3rd week of a month that has brought so much of red into our lives. Nifty was knocking the doors of 11800 at the beginning of the month and now we are going towards 11200. More than 500 points lost in 3 weeks and today, things look much better but it is not sure if its real or after a green open whether it will fall again. The US markets are doing with Dow Jones closing more than 250 points up ad S&P 500 marching towards 3000 levels. All time highs are being made in US and will India also start recovering now? Asia is positive today with all markets in green so India will also have a positive start.

On the domestic front, things are looking slightly better with Rupee strengthening to 72.3 levels on Wednesday’s trade and the dollar index has fallen for the last two days and dollar is continuously weakening and its below 94 mark now which is a 2 month low. So, there is a possibility that rupee might strengthen further to go up below 72 mark. Bond yields also are looking to go below 8% and if all this happens it will add a lot of positivity to Nifty. Brent Crude also has stabilized around 79 mark and though its not a great news but we can be satisfied that it has not touched 80 mark in last 2 days.

On the derivatives front, the markers continue to be positive. First is though Nifty corrected 40 points, the Nifty futures premium has gone up from 30 to 38 points and rise in premium in a falling market suggests that at lower levels there is a lot of buying. Another indication is Volatility should go up in a falling market but on Wednesday volatility also fell and that also indicate some bullishness. On the options side the put call ratio fell to 1.14 from 1.19. 11000 has replaced 11200 as the strike with highest accumulated open interest. On the call side 11500 has the highest accumulated open interest. So, 11000 can be tested in a worst case scenario and 11510 is the roof for the market.

What is Nifty call for the day?

A holiday accumulation of 30 points and a positive Asia means we can open 70-80 points gap up and that means 11300 plus opening for Nifty today. If that happens then sustaining that level could be a crucial thing. If it sustains then 11340 will be the first resistance that Nifty might face and on the downside 11250 is a support. I suggest to go long on Nifty if 11300 is sustained and Nifty is rushing to break the 11340 resistance. Then yo can keep a 11380-11400 target for the long till the expiry. Stay out if there is selling after gap up and Nifty remains below 11300.

Market Trade Setup 19th September #Nifty

Market Trade Setup 19th September

We are at the middle of the week with a holiday coming up tomorrow and what we saw yesterday was another big fall of close to 100 points on Nifty and that has taken away a lot of positive sentiment that was there throughout the day. Today is a new day and Global markets are looking bit green. Dow Jones has ended positive around 180 points and Asia today is green with Hong Kong up more than 250 points. This green is mainly on the trade wars  not being as worse as they were expected to be. China retaliated yesterday with a 10% tax on 60 billion worth goods imported from US. This is less than 25% that everyone was expecting. That is some sign of relief coming to the globe.

Coming to domestics, the two big worries are back again. Rupee last evening closed at another all time low of 72.97 and now its touch away from 73 and once 73 is crossed that will have a huge psychological impact on Nifty. Added to that is the Brent Crude which surged yesterday to almost 79 dollars per barrel and unless Rupee behaves strong and Brent recedes, Nifty will have a tough time in going up. On the other news, Bank of Baroda fell by 17% and the reaction might come to an end today and banks now have the Rupee problem to worry about and everyone seems to have forgotten the BoB, Dena and Vijaya bank merger.

Coming to Derivatives, the signs are opposite to what the fundamentals are showing. Though Nifty fell by 100 points, the Nifty futures premium did not fall and held that 30 point level. Plus the overall long positions which were at 42% at the start of the day yesterday went up to 44% indicating strong buying at the lower levels. In the options market also the Nifty put call ratio fell to 1.19 from 1.28 and this is an indication that now calls and puts are coming to even levels and Nifty needs to go up now. 11200 put has replaced 11400 put in accumulated open interest and that means Nifty if it falls today can go up to 11150 levels. On the call side also 11500 call replaced 11800 call in accumulated open interest and now 11530 is the roof of the market. This is a significant development that one needs to take into account.

What is the Nifty call for the day?

You would have taken a long position in Nifty at 11350 levels yesterday and in last one hour Nifty fell to 11280 and you are sitting on losses. Today we might have a positive opening around 11320 levels and Nifty might go to 11350-11380 levels intraday. As fundamentals are looking bad, it is better to exit this levels with a zero profit or a minor profit instead of taking it to Friday when things are going to be uncertain. Tomorrow is a holiday on account of Moharram and it would be risky to take positions to Friday unless you are sure that 11400-11420 levels would be reached on Friday. Its a call that you have to take on your own.

Market Trade Setup 14th September #Nifty

The last day of the 2nd-week approaches and what a week it was. There were only 3 trading days so far and first two days saw markets falling nearly 300 points and Wednesday saw a recovery of around 80 points.  Global markets were bullish yesterday when we were not trading and Hong Kong went up more than 600 points and Dow Jones last night went up nearly 150 points. Today also Asia is trading in green and most India is looking like opening with a big gap up.

On the domestic front, the big news on Tuesday evening post market hours was IIP and CPI data which came almost as per the expectations. CPI inflation came in at 3.69% which is much lower than 4.1% seen in July. This was primarily due to the drop in food inflation especially the vegetables. I had expected that in my Wednesday post. Food inflation came at just 0.2% compared to 1.3% seen in the previous month and vegetable inflation came at as low as -7%. IIP also meanwhile has come at 6.6% for July which is marginally lower than June IIP of 7%. The big factor on Wednesday was the rupee recovery. Rupee at one point went all the way up to 72.91 before recovering to 71.86 and closed at 72.18. Crude also came back sharply after touching 80 dollars and now trading at 78.3 dollars. This will bring some positive sentiment to start with. 

On the derivatives front there was selling happening in Nifty though markets went up yesterday. The overall long positions in Nifty now stands at 43% down from 44%. But there is some good news on the options front where the nifty put call ratio went up from 1.24 at the beginning of the day to 1.29 at the close. 11200 put has added 3.6 lakh positions and on the call side 11400 call added a maximum of 2.7 lakh positions. Now 11400 put still continues to hold maximum accumulated open interest of 41.4 lakh positions and on the call side 11800 call has 43.4 lakh positions. So at 110 premium 11290 and at 10 rupees premium 11810 are the floor and the roof for the market respectively. 

What is the Nifty call for the day?

A green Asia and missed out trade means we will open gap up almost 80 points at 11450 levels and from there 11500 is a huge resistance. On the downside 11380 might act as big support. I suggest you go long if NIFTY drops below 11400 levels with 11450-11480 as the target. This trade can be taken before 9.30 or anytime in the trade or after 3 pm. If taken after 3 pm consider taking the position to Monday.

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 17th August #Nifty

Markets and News

Weekend is here and a sad news to end the week. One of the greatest Prime Ministers that India has seen, a poet, orator, journalist and a philosopher, former Prime Minister Atal Bihari Vajpayee passed away at 5.05PM yesterday at the age of 93. Homage to the great son of India and a loss that cannot be filled in, in the near future. Coming to markets, there was a huge green yesterday as Turkish Lira started rebounding and gained 25% of its lost value. Dow Jones has gained more than 300 points and all the Asian markets are in green celebrating the re-bound of the Turkish Lira.

Domestic Cues

Coming to the domestics, Rupee has hit another all-time high today with Rupee touching 70.50 level before recovering a bit. We need to see if Rupee will reversing the trend or not needs to be seen. Today is a holiday for the money markets on account of Parsi New year so the 70.15 level at which rupee closed will be final value till next week. On the Brent Crude front, its right now at 71.1 dollars and that continues to be the good news. There might be some impact on the oil, paint and tyre stocks as the Brent is now firmly settling around 70 dollars now.

Derivatives Action

On the derivatives front, there has been selling that is happening in the Futures market but it is offset by buying that is happening at the lower levels. In options market the Nifty put call ratio corrected to 1.60 from 1.70 seen at the beginning of the day yesterday. Positions were wound from every level and 11000 put saw 3.1 lakh positions unwound and 11300 put also saw 1.6 lakh positions unwound. On the call side 11500 call added 3.3 lakh positions and 11400 call saw 2.8 lakh contracts being added. Even 12000 call saw 3.1 lakh positions built and that is the surprising news.

What is the Nifty call for the day?

We did not react much for the falling Turkish Lira, so we will also not react much for the appreciating Turkish Lira. So, our markets depends today on our fundamentals and we might open again around 11400 levels. Yesterday, if you had gone short at 11420 levels you would have met your target of 50 points when it fell to 11360 levels. Today might be more of side-ways movement and the bias is more towards downside than upside. So, I suggest stay away from taking any new positions. Lets start the fresh trade on Monday.

Market Trade Setup 9th August #Nifty

Markets and News

Another new all time high hit yesterday and the market is moving only higher, higher and higher. The US markets are also playing the ball and yesterday NASDAQ posted 7 session positive closing which is happening only second time this year. Dow Jones took a slight breather last night when it closed 50 points down. The best news is coming from the Crude oil front, where Crude it a 7 week low with brent crude falling below 72.5 dollars straight from 75 dollars. Asia is gravitating between mild red and mild green.

Domestic Cues

On the domestic front, the story of this month has been coming back of FIIs to the Indian markets. In May and June FIIs sod in cast market and July saw an almost flat action from FIIs. August however saw some positivity and they bought 1134 crore and that means money is coming back to India from FIIs. On the other news, HPCL and BPCL have reported weak numbers on the back of increasing Crude price and pressure on margins. NMDC is down but they look much better than expectations. In the pharma space Cipla has come up with a decent set of numbers.

Derivatives Action

On the derivatives front there has been a mixed action on the futures front and the Nifty long positions on futures remained constant at 58%. However the action on options front was different with a lot of demand getting created for options. The Nifty put call ratio rose to 1.77 from 1.67 and that is the big worry. 11300 put added 7.9 lakh contracts and 11400 put added 7.8 lakh contracts and 11500 put added 3.8 lakh contracts. On the call side 11700 call added 2.1 lakh contracts while in all the other strikes there was unwinding of positions.

What is the Nifty call for the day?

A flat Asia means we might open flat around 11450 and these all time high areas really dont have markers. Crude is positive but the internals are putting pressure on markets. If FIIs continue buying in cash market, it will make Nifty to go up, but this is an exhausted Nifty and 11480 is a zone where it might halt. On the down side 11400-11420 is a support zone and we need to see whether Nifty has the mojo to cross 11480 or not.