Tag Archives: Stock Markets

Market Trade Setup 22nd April #Nifty

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

Market Trade Setup 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 21st February

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

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

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

What is the Nifty call for the day?

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

Market Trade Setup 2nd January #NIFTY

Market setup 2nd January

So the working days start again after a long Christmas and New year and now nearly 80% of traders are back into business today and the remaining 20% will be back by next week. The US markets and Europe were shut yesterday on account of New year and so there are no cues available. Some of the Asian markets like Japan are not trading even today but most of Asia has woken up from the holiday and 2019 for them is not a great start. Hong Kong is right now down more than 600 points and that is the weakest level in the last 2 months. Other Asian markets like Shanghai, Taiwan, Korea and Singapore are all in red almost down by 1%. This is not a positive signal for us.

On the domestic front, we had seen a Happy New Year rally in the last hour of trade yesterday where Nifty had crossed 10900 levels but today is a different day. Asian markets are given a lot of negative cues. Domestically we had the December 2018 auto sales figures that came in and that was not encouraging. It has shown a fall in volumes both in passenger cars as well as HCVs. Maruti, Eicher, M&M and Ashok Leyland will have some negative impact on account of this. The only good news that came in was from the ATF front where Air Turbine fuel was cut by more than 14% and in the last 2 months, we had seen 25% cut in fuel. ATF account for 40% of operational costs for Airline companies and Indigo, Spice Jet might see some positivity. Also, the Airfares might come down by 10-15% in the coming days. Jet Airways has its payment problems with banks to the tune of 14,000 Cr so that stock will have some problems. Crude is still at 53 dollars which is positive.

On the derivatives front, yesterday was a very dull day where we saw 2.1 lakh contracts in Index futures and 4.2 lakh positions in stock futures. On the options side, 88.6 lakh positions were added in Index options while 2.8 lakh positions were added on stock options. 10800 put added maximum open interest positions of 3.8 lakh while 10700 put added 2.8 lakh positions and 10500 put added 2.6 lakh positions. On the call side, 11100 call added 2.5 lakh positions while 11500 call added 1.7 lakh positions. 11200 call and 10500 put still continue to have the highest open interest and 11000 call is close behind. 

What is the Nifty call for the day?

A weak Asia means we will open a bit gap down and might open between 10850-10880 levels and 10820 to 10920 is the likely range for today. Things will be dull in the morning but with Europe opening in the afternoon things might change. We might see an up move if Europe opens in positive and then 10920 resistance will be tested again and it might strech upto 10950. On the down side, 10780-10800 which is a 20dma and 200dma is the support that should hold. Breaking this would mean we will go towards 10600 which is 50dma. I am sure you would not have taken any positions yesterday, but if you have taken I would suggest you to exit positions today above 10850 for no profit no loss and wait for the next move. No trading till afternoon.

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 17th September #Nifty

Market Trade Setup 17th September

Second half of the September month starts off on a not so good note. We had seen two monster rallies after two big falls on the first two days of the last week. Now Nifty is above 11500 but there is nothing much to celebrate. There was a storm that has hit North Carolina last weekend, we also have a typhoon hitting Hong Kong and that has shook the Asian markets. Hong Kong is down more than 500 points and all the other indices like Shanghai, Korea are also trading in red. Dow Jones on its part had closed flat on Friday and that doesnt matter really that much.

On the domestic front, the news is all about the cabinet meeting that PM and FM called on Saturday to review the economic situation came out with nothing in concrete. The only positive was FM saying very clearly that the 3.3% target of fiscal deficit would be met at any cost. An announcement was also made on increasing the FPI investment in masala bonds but at a time when rupee is falling this doesnt matter much. There was nothing on rupee or falling GST collections or on the bank restructuring or on FCNR bond issue and all this has left everyone disappointed and this would be visible in currency and bond markets today and that will have impact on Nifty. Dont be surprised if Rupee goes to 73 all the way from 71.8 that is the closing value on Friday.

On the derivatives front, the surprising factor on the trade on Friday is, despite Nifty going up 140 points the premium on Nifty futures shrunk to 32 from 40 points. The overall long positions remained at 44% indicating that though the Nifty is going up, not many are taking long positions and risk it to taking on Monday. So, why was Nifty moving? It is because of the action in Options market where the Nifty put call ratio went up from 1.29 to 1.38. There were puts bought and puts sold also. There were 3 puts bought for every 2 calls and there were 5 puts sold for every 3 calls sold. 11400 put still continues to have maximum accumulated open interest and on the call side it is 11800 call.

What is the Nifty call for the day?

Our fundamentals on currency market going to hit Nifty today and Nifty will open gap sown at around 11470-11480 levels and it might test intraday low of 11420-11450 levels. I feel that it is a single day disappointment and we might start recovering from the time Europe opens in the afternoon also. So, the better strategy is to go long when Nifty is in that 11420-11450range with a 50-60 point target to be achieved either today or tomorrow. There is a fundamental involved so the timing of the long position is critical and should be taken only after confirming that the last low intraday has been made.

Market Trade Setup 3rd September #Nifty

September starts on a note that it is known for. Septembers always have been cautious and no over-optimism or pessimism. That is why if you compare the last 3 years Septembers were always flat not getting carried away either by good news or bad news. Let’s hope that this September also behaves the same way. The US markets were flat on Friday and today they are shut on account of labor day so no big clues available. Asia is down on account of trade wars in Europe emerging slowly. Hong Kong is down more than 250 points and other markets were down anywhere between 0.5% to 1%. 

On the domestic front, the big news that will move the market today is the GDP number that came at 8.2% and the GVA number that came at 8%. For a 8% GVA if the tax collections were good then we would have seen a 8.3 to 8.4% GDP but 8.2% indicates lower tax collections which is a worrying point. Another worrying point is the drop in the services sector GDP has actually been lower than 8.2%. The good point is manufacturing that grew 13.8% and excellent numbers from construction and Agriculture that indicates that jobs are getting created in the unorganized sector.

The other domestics are the very good numbers that have come from the auto sales in August and this could be positive. Commercial vehicles grew very well led by Ashok Leyland reported 28% growth in commercial sales, Tata Motors commercial vehicles grew at 26% and M&M commercial vehicles sales went up 25%. Maruti, Hero and TVS saw a drop in sales due to Kerala floods. Now coming to the negative fundamentals its the strengthening dollar again where the dollar index crossed 95 and stands at 95.2 now. That means fresh pressure on Rupee and we might see Rupee tumbling to another all time low. On the other hand the Brent crude prices are still holding on and not showing signs of falling. They are still around 78 dollars per barrel.

Derivatives Action

On the derivatives front, the first day saw a massive short build-up in the Nifty futures and the percentage of Nifty long positions came down from 64% to 60%. On the options market also the shorts in the calls side is more than the shorts on the put side. But when it comes to longs, there were 2 puts bought for every call. The put call ratio now stands at 1.55. 11600 put added 7 lakh contracts and 11500 put added 5 lakh contracts and 11700 put added 3.1 lakh contracts. With this the 11600 put has the maximum accumulated open interest now and that means 11520 will be the new floor for the market in this series. On the call side 12000 call added 5 lakh contracts and 11800 call added 4.9 lakh contracts and 11800 still has the maximum accumulated open interest. At 100 rupee premium 11900 could be the new roof. 

What is the Nifty call for the day?

GDP numbers will make our markets open in green at 11700 levels and the long position you have taken on Friday at 11640-11660 will have a 40-60 point profit. First resistance might come t 11720-11740 zone and Nifty might correct to 11650 intraday after touching this level. So, it is better to exit the long positions as soon as 11720 is reached. The minimum profit you are guaranteed with is 50-60 points. As the market starts negotiating this positive and negative factors, stay out and see where it closes. Any close below 11680 is not good for the near term.

Market Trade Setup 31st August #Nifty

Market Trade Setup 31st August

The start of the September series on the last day of August. It’s not a great start. The trade tensions in US are back again with Trump throwing tweets on a daily basis about tariffs. Dow jones closed 140 points down last night mainly on the uncertainties and trade tensions in US and the emerging markets in Asia has also caught up with the trend. Hong Kong is down more than 400 points down now which is around 1.5% and Taiwan is also down close to 1%. The dollar however is weakening with dollar index going below 94.7 and that is the only mild positive for emerging currencies.

On the domestic front, its the GDP day today and that is going to have a big impact on the first half of the September series. The Q4 GDP came at 7.7% and this time the forecast is between 7.5-7.6% but I somehow have a feeling that it could be much more than that. Am looking at a GDP of 8% or maybe bit more also. I have my own logic for this and let’s see what it finally turns out to be. Apart from GDP today is also the day we will get the forex reserves weekly data and we are at 400 billion and we need to see how far it goes.

Another fundamental to worry about is the weakening Rupee which closed at another record low at 70.74 and today it might even move to 71 and another big worry is the Crude oil prices. Brent crude is inching towards 78 dollars and last time we saw 78 on crude rupee was at 68. Now it is close to 71 so this 78 on Crude is going to be much worse and the month end dollar demand will surely put more pressure on Rupee. On micro news, Rana Kapoor gets a temporary relief as RBI says he can continue as MD until further notice. 

This decision of RBI is nothing but continuation of uncertainty as we dont know what that further notice means. It could be one month of 2 months or even 15 days. They might give him 1 year extension and might ask Yes bank to get a succession plan ready by then. The reason why Yes bank is in problem is because of the divergence in their Quarterly results. Last time when Axis bank reported divergence in their quarterly numbers, Shika Sharma was not given extension by RBI. The same is not being done for Yes bank and RBI is taking its own time to decide.

What to expect from September series?

September series starts off today and if we see the last 3 september series they were all negative series. 2015 September series was down 81 points and 1%, 2016 was flat with 0.1% and 2017 september was down by 147 points. The August series ended 510 points up and the July series ended 558 points up. The roll overs were also higher this time around 69%. The long positions on Nifty futures is at 64% which is much better and the open interest starts at 2.37 Crore shares on Nifty which is the highest this year. The highest open interest on put side, am considering at 11400 put and on the call side at 11800. Nifty is now close to 11700 so there is a room for downside than upside.
I would expect September series to find some support at 11400 level on a fall and a huge resistance at 11800 level on the rise. On the broader level 12000 is possible this series and 11400 on the downside. The GDP news today and the macro data coming in after 10th September will have a big impact on Nifty. The Nifty put call ratio is starting at 1.12 and that is a very good level to start with. 

What is the Nifty call for the day?

A mild to red Asia means we will start a bit gap down around 11650-11670 levels and what happens from there needs to be seen. The first day of any series is usually positive but today could be a different day. Fundamentals like Rupee and Crude will have a big impact and dont be surprised if Nifty corrects to 11600 level or might even go to 11550-11580levels. That is a good point to go long on Nifty with GDP as the trigger for markets to open gap-up on Monday. Even if you dont get a gap up on Monday, you have the whole series to play with. I suggest a long anywhere below 11630 going all the way up to 11550.

Market Trade Setup 29th August #Nifty

As we approach expiry, bulls are roaring and something extra-ordinary is happening. The biggest news is the upgrade of Q2 GDP of US from 4.1 to 4.6% and the growth is firmly back. A developed economy like US growing at this rate is extraordinary. Dow closed flat after days of uptrend with NASDAQ posting another record growth after Apple gained almost 1%. Asia is also celebrating where every market except China is seeing a growth with both Japan and Hong Kong up 150 and 100 points respectively. The dollar is still weak and consumer confidence index data for August 2018 is showing the highest level since 2000.

On the domestic front, we had a Rupee that that supposed to strengthen has weakened yesterday. Now the fuel prices have been revised again and Diesel went up by 15 paise on an average yesterday and now is at record highs. Petrol prices also went up by 12-15 paise across the country and this is primarily due to Brent Crude which is still at 76 dollars. Power companies are still in problems with almost 25 power companies facing bankruptcy now. Govt is meeting on 31st August to try and resolve this issue. So, there are some things to worry about on the domestic front as we approach the expiry. 

On the derivatives front, the Nifty put call ratio jumps to 1.94 from 1.85 and its been years since we have seen that levels. It is very difficult to sustain this level and Nifty has to fall so that there will be some reduction in put positions in the form of unwinding. The 11000 put still continues to have maximum accumulated open interest and yesterday 11700 put added 16.2 lakh positions and 11750 put added 8.1 lakh positions. On the call side 11850 call added 8.6 lakh positions and 11800 call which has maximum accumulated open interest added 2.3 lakh positions.

What is the Nifty call for the day?

Nifty is likely to open flat around 11720-11750levels and this is where Nifty has to decide whether to go up and correct. A small correction is on the cards looking at the options data and that might take Nifty to 11680 levels first and 11650 subsequently if 11680 doesnt hold. But on the upside the peak for Nifty is now at 11820, if it wants to climb that. In such scenario I suggest a short straddle during the course of today, so wait for my tweet.