Tag Archives: Nifty50

Market Trade Setup 23rd April #NIFTY

Crucial day of the entire April-May election months with 117 seats of 543 seats going for polls today. This is the phase where the largest number of seats are going for polls and with this 303 out of 543 seats would have completed and more or less we will get an idea which way the wind is blowing. So, tomorrow will be a very crucial day for the market and the behaviour of the market tomorrow will more or less tell you who is winning and who is not. But for today the global cues are mostly centred around Brent Crude which went to 6 month high of 74.5 dollars and on its way towards 75 dollars. Added to that Asian markets are subdued and Dow closed in a slightly negative territory losing 50 points.

Coming to domestics, today is the polling day and as told above 117 seats are going for polls and BJP holds 62 of them. From now on, it’s going to be more and more of BJP seats as we are moving towards North India. South will end polling with today, as 1 seat from Tamil nadu, 20 seats from Kerala and 14 seats from Karnataka are going for polls. Apart from that the entire state of Gujarat where BJP holds 26/26 seats is going for polls along with the remaining 7 seats in Chattisgarh. Goa’s two seats are also going for polls today. There are 1612 candidates from 15 states and Union Territories are going for polls. Evening there will be a post from me which will talk more about the 3rd phase. Q4 results are also going to pick up from today as cement major ACC cement along with Tata Global and Sterlite tech are coming up with Q4 results.

On the derivatives front, yesterday was a very low volume day as the participation from the FIIs was minimal due to Easter Monday. The fall coming from a low volume is not a very significant indicator and the Nifty put call ratio fell to 1.35 from 1.71. The volatility also jumped to 24% which is highest in many months. 11700 put shed 8.4 lakh positions, and 11800 put shed 8.8 lakh positions and the only strike which added open interest is 11550 put added 3.5 lakh positions. On the call side 11700 call added 29 lakh positions and 12000 call added 9.8 lakh positions. 11700 call and 12000 call almost have similar open interest of 41.5 lakh and 41.4 lakh respectively, which means either 11720 can be the top for this series or it can go all the way to 12000. With 24% volatility, nothing can be ruled out.

What is the Nifty call for the day?

Yesterday we saw a sudden fall in the afternoon to 11550 levels before recovering and closing just below 11600 mark. I had warned you not to go long if Nifty drops below 11670 mark before 10.30 and at 10 AM itself Nifty touched 11650 mark and I hope you have stayed away from the market. Today is the day where you will go long if you believe that BJP is winning this election. From today we can see a turnaround for next 2-3 days that might take Nifty past 11900 and might even go to 12000 mark. We can start seeing it somewhere today afternoon itself and tomorrow we could see that playing out in full swing. For today, we might open flat around 11600-11630 mark and you can go long here and keep a target of 50 points from wherever you were able to go long. 11700-11720 is a big resistance that it has to overcome, and if that happens then Nifty is on its way towards 12000. All my predictions are based on BJP winning and if the news goes the other way then sees a big collapse towards 11500. 

Market Trade Setup 11th April #Nifty

Finally, the Election Mahotsav arrives. The 7 phase polling that we would see for the next 38 days is going to be breath taking with strategies and counter strategies by the ruling party and the opposition. All in all, we are going to see the most crucial election in the recent time, crucial than the one which happened in 2014, which incidentally was my first election and the first time I cast my vote. The global markets are not looking that positive as Dow closed flat last night and all Asian markets are in red especially the Hong Kong which is down 200 points and Japan down 150 points. Brent Crude is still above 71 dollars and that continues to be a big worry.

Coming to domestics, market movement today will completely depend on how the first phase goes today. Farm distress, jobs and national security are the major issues that we are facing in this election and the first phase today is mostly concentrated in South India. 44 out of 91 seats, which is roughly half of the seats going to polls are from South India, especially AP and Telangana. 60 out of the 91 seats are the rural seats and what rural south India thinks about Govt is important. As such BJP has very less stake in the south and out of these 44 seats in South BJP holds just 4 of them. But things are different in other 47 seats of North, Northeast and Western India. There out of 47 seats BJP holds 34 seats so it is extremely crucial that BJP should try to hold many of them. The big challenge is the 8 seats in UP where BJP holds all 8 of them. All these are from western UP and with SP-BSP-RLD combine, BJP is facing a united opposition.

On the derivatives front, as Nifty fell close to 90 points yesterday, on the slew of bad news for BJP starting with the Supreme court verdict, there was selling that happened in the Nifty futures market. The Nifty long positions which fell to 67% have now fallen to 63% at the end of the day. In the options market, however, the demand for the call continued and the Nifty put-call ratio fell to 1.33 from 1.42 mark seen at the beginning of the day. Today is the Nifty weekly expiry and if we look at the open interest positions, 11500 put has the highest open interest, compared to 11600 put yesterday and 11700 call has the highest open interest. Right now Nifty is at 11584 which is almost the mid point.

What is the Nifty call for the day?

A red Asia means we will also open in the flat zone around 11580-11600 mark and as the options positions indicate today could be a day of volatility where market can test 11500 mark and even might go to 11680 mark. Much of it depends on how the elections of the first phase go, especially in Uttar pradesh and Maharashtra. Yesterday, you would not have taken positions, considering the fall and the volatility that Nifty has shown. If you have not taken a position, its good and do not go for any fresh position now. But if you have ended up taking a position then all that you need to do is to hope that you get a sharp up move above 11650 mark so that you can exit that position. Today is election as well as expiry so its time to wait and watch. 

Market Trade Setup 3rd April #Nifty

Yesterday markets went as per the predictions at every step. I said Nifty will take support at 11650 and will be facing resistance at 11720-11740 zone and close in the range. It turned out to be exactly the same. The moral of the story is, whenever the market gets predictable for many, it changes its texture. Are we in the consolidation phase that could change the texture of the market needs to be seen. Globally things look stable as US market consolidated a bit after a 300 point rally and ended 80 points in red. Asian markets also opened in the mildly red territory this morning but as the day is progressing, Asia is turning greener. So, we have Japan up 150 points and Hong Kong up 250 points and all the other Asian markets are also in green. Brent is now the reason for worry as it is almost approaching the psychological mark of 70 dollars, trading at 69.7 dollars now. Rupee, however, is on the downside is at 68.7 to a dollar now.
On the domestic front, the big news that came was the Supreme court judgement that struck down the April 12th circular issued by RBI. Now the companies need not be dragged to IBC on default of over 90 days and a loan will not be called as a stressed asset if there is a delay in the payment between 1 to 89 days. This is a major setback to RBI and when RBI is discussing monetary policy, we need to see how much impact it will have on their decision. On the monetary policy front, there is a 100% probability of rate cut with 80% chance for 25 bps cut and 20% chance of a 50 bps cut. Coming back to Supreme Court judgement, RBI now has only two options. One is to re-approach the SC with a review petition and the second is to come up with a fresh draft by dropping some controversial clauses that were added earlier. Apart from that we also had an election manifesto by Congress and it failed to build up the required buzz and ended as a 1-hour event.
On the derivatives front, there was a pick up in the long positions in Nifty Futures again and the long positions in Nifty Futures have jumped to 68% again. The premium is also healthy at 56 points and all this show some bullishness. On the options front, the Nifty put-call ratio went to 1.52 from 1.48 on the demand for short puts. 11700 put added maximum open interest yesterday of 4.2 lakh positions and thus 11700 put now has maximum open interest for tomorrow’s expiry indicating that 11660-11680 is very strong support. On the call side, 11900 call added the same 4.2 lakh positions and 11900 call is slightly ahead of 11800 call as the strike with maximum open interest. So, we now have a situation where today and tomorrow we can gravitate between 11680-11820 and if by chance we get a 50 bps rate cut then we can see Nifty going past 11880 mark. For monthly expiry however 11500 put and 12000 call have the highest open interest.

What is the Nifty call for the day?

Yesterday, you would have exited your positions for a 60-70 point profit and today we will have a positive start with Nifty opening in 11720-11740 range which is a strong resistance as of now. Are we going to see an all-time high today or immediately after the policy announcement at 11.45am tomorrow needs to be seen. Nifty has the resistance zone extending up to 11770 levels and till the time that is taken out decisively, we cannot move towards 11850 mark this series. Otherwise, this series expiry will be around 11800 mark. So, my call for the day would be, if you get a dip after the morning highs, you can get into another long position between 11680-11720 with 11760-11800

Market Trade Setup 29th March #NIFTY

Today marks the start of the first series of the new financial year 2019-20 and the last trading of the present financial year of 2018-19. This is a transition day and yesterday we ended the March series on a very high note. I was always telling you that if Nifty manages to cross 11520 it can go all the way up to 11580-11600 mark and yesterday we have seen a high of 11588 before closing at 11570 mark. Global cues are also positive as the bond yields went up in the US and the fears of recession have temporarily taken a back seat. Dow gained over 90 points and today all the Asian markets are in green with Hong Kong up 150 points and Japan up 200 points. Crude is only the point of worry as it crossed 68 dollars and trading at 68.1 dollars now.

Yesterday was the March series expiry and we have closed at 777.5 points higher and this is the second best series we had from the time Modi Govt took over in May 2014. The January series of 2015 was the best with a gain of 778.3 points. The difference is just 0.8 points and thus we can see that the market has gone to the time when Modi took over as the Prime Minister. The next best news is turnover. Yesterday saw a turnover of 22.75 lakh Crore which is the highest we have seen from the time the options markets started in India in 2005. Now we are a truly 20 lakh plus crore turnover market and March 2019 series can be a benchmark for the future. This was mainly on the FII investments and March saw the highest FII investment in the last many months. 

What to expect from the April series?

After a fantastic March we are now focussing on the April series. April series has many fundamentals to look for and top of that are the 4 out of 7 phases of polling coming in April month itself. Second is the Q4 and Annual results of the companies that would start coming after 10th April and that will have a telling impact on many stocks as well as Nifty. Added to that we have a very important trigger of bi-monthly monetary policy coming on 4th April which also happens to be the weekly expiry for Nifty. This monetary policy is expected to give a rate cut of 25 to 50 bps and market would be keenly watching for it. Plus we will also have the usual CPI and WPI inflation data as well as the IIP data coming in for February and January respectively and that will show which direction GDP will move.

On the technical side, the April series opens on a heavy note with 69% long positions which is the highest in 2019. The rollovers are also higher for Nifty and they came at 67.6% vs the three month average of 65% and Bank Nifty rollovers are even higher coming at 71%. Coming to the options the Nifty put-call ratio starts at 1.58 which is a fair value to start so we will not have an immediate fear of fall. The markers for April look very interesting indeed. On the put side 11500 put has the highest open interest followed by 11300 and 11200. So, the first level of support will come in the range of 11380-11410. On the upside 12000 call has the highest open interest and no other open interests are closer to that. That means we can see Nifty touching 12000 mark this series itself and that is heartening, and this happen we will be in the all time high zones for Nifty. 

What is the Nifty call for the day?

April will start on a decent note with opening happening between 11570-11600 and first resistance will come at 11620-11650 mark and 11550-11570 coming in as a support. Today is the first day of the series and the first day will usually be green. You have made profit yesterday as the targets of 11580-11600 have been reached for the positions you took below 11500 in 11460-11490 zones. If you have not exited then you can exit today if Nifty crosses 11600 mark. I would not suggest a fresh position to be initiated today and afternoon might see some volatility. Even if you lose out on a chance to make money today, enjoy the last working day of this financial year by counting your profits rather than putting them in the market.

Market Trade Setup 28th March #Nifty

The expiry day for the third series of the year is finally here. Unlike the last two series which saw close calls for bulls and bears, this series has been completely in the grip of bulls having gained 653 points so far which is the highest in the last 8 months. Today’s expiry has a lot of global and local cues to worry about and the primary of them is the yield inversion where the 10 year US bond fell to 2.35% which is the lowest since 2017 and now the talk of slow down and recession is growing louder. The result was the US closed in mild red losing more than 30 points and Asian markets are also in red with Japan losing more than 300 points and other markets also in mild red.

On the domestic front, yesterday was an action-packed day with PM Modi putting up a tweet that he is going to make an important announcement at 12 noon and the whole nation waited with bated breath. Finally, the announcement was about India being the 4th country in the World to test the Anti Satellite missile at lower orbits of as low as 300kms. This could protect us from any spying that enemy nations can do on our data and communications and also we can shoot any satellite spying on us. This is indeed a great achievement but what it ended up opposition complaining to EC about the violation of poll conduct. EC has taken it up for probing. So, politics dominating the space today than economics.
Coming to derivatives, today is the expiry day and we had January series going to bulls with 60 points and February going to bears with 40 points and till last day we were not able to predict the winner. But this series is firmly in bulls grip with 653 points and yesterday we have seen a record turnover for the penultimate day of expiry. The turnover was at 17.2 lakh crore and now we have to see whether we will hit the 20 lakh crore turnover or not. The Nifty put-call ratio fell to 1.49 from 1.64 as there was a lot of put unwinding. 11200 puts saw 6.1 lakh unwinding, while 11300 put saw 4.7 lakh, 11000 put 4.1 lakh and 11400 put 3.5 lakh. The highest unwinding on put side happened at 11500 put which saw 7.4 lakh positions disappearing.
All this have left the put side or support side very confused and 11000 put has maximum open interest followed by 11400 put. So, we can conclude that 11400 is a support that will hold for today. On the call side, 11600 call added 11.2 lakh positions followed by 11450 call that added 6.5 lakh positions and 11550 call added 5.4 lakh positions. 11600 call has the highest open interest followed by 11500. So, 11600 should be achievable if Nifty doesn’t correct today. If we take a hint from 4th April weekly expiry 11500 call has the highest open interest and very close to it is 11600 call. So, options present a very confused picture now.
What is the Nifty call for the day?

We will have a flat opening around 11450-11470 zone and then the first resistance will come at 11520 levels and if Nifty is able to take it effortlessly then we can go all the way upto 11580-11600 mark intraday. On the downside 11410 is strong support. So, my feeling is today if the open remains positive and Nifty doesn’t fall much then we can go for a long position in April series. Am saying April only for safety reasons. But one thing we need to remember is, last two months expiry did present some volatility and today also you might see it and don’t be surprised if Nifty goes to 11580 if it manages to cross 11520 in the first one hour. The target for your long position taken below 11500 mark should be 11550-11580 mark, any time in the next 3-4 session starting from today.

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 Setup 23rd October #NIFTY

Market Setup 23rd October

It was an unexpected day yesterday, where contrary to all the expectations, Nifty opened more than 100 points gap up and closed the day more than 50 points in the red. That simply means Nifty lost more than 150 points intraday but at 10300 it took support to go to 10360 twice. Thus the call I gave to look for 50-60 point profit only and exit yesterday itself came 100% true. Today its an altogether different story where Nifty might open 100 points gap down all the way close to 10150 levels and if you look at volatility its close to 22% and that is the reason why you are seeing such wild swings in the market. 
Global cues are not at all positive to start with as US is fighting almost every country in the world and the word trade war has become a common norm now. If you ask me, why there was no trade war yesterday when global markets were in green, my answer is this is all the play of the market where we try to find reasons for a fall and markets do what they want to do. To put it in simple words, markets across the world had to correct with what US is doing and it will choose to fall when it wants and not when we try to estimate it. Dow Jones fell 150 points and that made Asia go open in red and almost all Asian markets are in red.

Coming to domestics, the good HDFC results couldn’t do anything much to the market and the Q2 results that came yesterday were not that great. Asian paints disappointed with volume, EBIT and PAT along with margins have come way below the expectations. So, this quarter results were bad so far except a handful of companies. The only good news is the Brent Crude prices which are still below 80 dollars, trading at 79.6 dollars. But the bad news is Dollar index has again crossed 96 mark and that could put pressure on the Rupee and it might go to as high as 73.80 mark. There are some important Q2 results awaited today from cement, banks and infrastructure companies that that is the only good news we will be banking on domestically.

Following are the Q2 results expected today.

1. Adani Ports
2. Ambuja Cements
3. Bajaj Fin Services
4. Escorts Finance
5. HCL Tech
6. HDFC Life
7. ICICI Prulife
8. Indian bank
9. RBL bank
10. TVS Motors

On the derivatives front, the morning started on a positive note but as the nifty started falling in the last hour many positions have started to change. Though Nifty ended in red, Nifty put call ratio has actually gone up from 1.07 in the morning to 1.10 at the end of the day. As predicted 11000 is no longer the roof of the market and that is cut short to 10500 mark as it overtook 11000 in accumulated open interest. On the support side 10000 still continues to be a strong support and 10200 is slowly emerging as the new floor for the market. 10200 put added nearly 8 lakh contracts and on the call side 10300 call added 4.8 lakh positions while 10500 call added 3.2 lakh positions. Today’s move will decide whether 10000 still holds or whether 10200 will replace 10000.

What is the Nifty call for the day? 

A weak Asia means we are sure to open below 10200 and as low as 10150. This is a strong support zone, that is between 10130-10150 levels and Nifty might take support there. If that doesnt happen then 10000 will be the next target. If the support is taken at 10150 zone then we can see Nifty going as high as 10300 level and with volatility at 22% we just cant rule out this possibility. So, in such an atmosphere I suggest you to wait and watch rather than rush into positions. If things are fine, I will tweet intraday the positions to take in the options market.

Market Trade Setup 8th October #NIFTY

Market Trade Setup 8th October

Start of the 2nd week starts and we are yet to recover from shocks of the first week. Nifty has seen the biggest fall in 9 years see at 6.1% and we have seen 700 points getting wiped out in a week’s time. If you see this week, globally things are looking mixed. The US is growing big time, strengthening the dollar and that is making all the other currencies weaker. The jobs data that came on Friday in the US shows that the unemployment rate in the US is at the lowest level in the last 49 years. China, the second largest economy in the World is going through some problems and the Central bank of China has decreased the CRR there to increase the liquidity in the economy, thus increasing the demand for loans. China is down by 1%, Hong Kong is down by 400 points and India will have some pressure of all this at the opening. 

Domestics and Derivatives! 

Coming to the domestics, the biggest jolt was given to us by RBI in our monetary policy on Friday, where the rates have been kept unchanged. The reason given was why should rates go up when inflation is not going up? This is a valid reason but a depreciating rupee needed higher interest rates to stabilize and since RBI did not hike rates to save rupee there was a massive sell-off in Nifty, which fell close to 290 points. For today, the biggest relief is from the Crude which fell from 86 dollars to 83.2 dollars and that might come as a huge relief. Apart from that the Q2 results season starts this week and Zee Entertainment will be the first company to declare results on Wednesday. 

On the derivatives front, there was a massive selling seen on Friday where 30 short positions were taken on Nifty futures for every long position. That has brought down the overall long positions in Futures market to 36% from 46% seen at the beginning of the series. On the options front, there was a lot of action on the call front and 7 calls were shorted for every 2 short puts and that brought the Nifty put-call ratio down to just 1.07 from 1.21 seen at the beginning of the day on Friday. 10200 put added 4.5 lakh positions while 10700 put shed 6.8 lakh contracts and 10500 put shed 8.3 lakh contracts, On the call side 10500 call added 16.7 lakh contracts, 10700 call added 11.2 lakh contracts and 10800 call added 14.5 lakh contracts. 11000 on the call side and 10500 on put side continue to have the maximum accumulated open interests. 

What is the Nifty call for the day?

After 700 point fall in 4 days, what can we expect? Nifty will open slightly gap down today around 10280-10300 level and immediate support will come at 10260 and what happens from there needs to be seen. 10380-10420 is a resistance zone and will Nifty overcome that or not needs to be seen. Today for me is a wait and watch day. After such big falls, its not safe to jump into trades now. Already you have a position and keep it intact and let’s observe the markets today to decide on the further course of action.

Stock Market Trade Setup 4th October #Nifty

Market Trade Setup 4th October

Ugly day, when you really dont want to trade if you are a bull. Being a bull, I feel like running away today and not writ this post but you have to do it as responsibility wont allow you to do so. What went wrong? Everything. US bond yields reach a 7 year high of 3.18%, Brent Crude has crossed 86 dollars, dollar index has crossed 96 and that would mean dollar is growing from strength to strength. The better than expected jobs data from US means increased rates are actually helping US economy to grow. The Dow jones is at a record high now.

If I have to explain you further, the risk free return in US has crossed 3.2% for an average global inflation of 2%. So, you will understand clearly that US pension funds and treasury securities are offering more than 1.2% of real interest rate for its risk free securities. That would mean, funds from everywhere will move to US and that means money will disappear from every emerging market including India and that explains why most of Asia is in red now. Hong Kong is down more than 400 points and in last 1 month it lost more than 2500 points. 

Domestics and Derivatives

On the domestic front, today is going to be real ugly with bond yields going up above 8.12% and could reach 8.2%. Rupee which closed at a record low yesterday will open around 73.70 zone and if things dont improve we might see a 74 on dollar and that would mean total disaster to equity markets. Added to that is the Brent Crude which is at 86.12 dollars now and that means all crude oil related stocks will be in deep red. So banks, NBFCs, crude related stocks everything is going to hit today and in this kind of atmosphere I dont know how much IT stocks can carry the market. 

On the derivatives front, things are horrible there and yesterday afternoon around 1PM itself the 10500 put has overtaken 10800 put for the maximum accumulated open interest. On the call side 11500 still has the maximum accumulated open interest. So, if you have a 1000 point band, Nifty could be exposed to wild swings. That is confirmed with Volatility index crossing 18% mark yesterday and it was at 15% just few days ago. The Nifty futures premium also has dropped a lot from 50 points to 32 points indicating a strong bearishness in the market. The Nifty put call ratio also dropped with demand for calls increasing, it moved from 1.41 to 1.36. 

What is the Nifty call for the day?

A huge gap down will take the market directly to 10770, which is the 200 day moving average and it might open below that at 10750 levels. What happens after that is difficult to guess because the next meaningful support comes at 10600 levels. Today Nifty might try to stabilize itself between 10720-10700 levels and might try to go to 10780 which is the 200 day moving average. I suggest to take a long call during the day or a long position in the futures and I would suggest what position to take during the course of the day.