Tag Archives: Trade Setup

Market Trade Setup 14th January #Nifty

Market Setup 14th January

The third week of the five week January series starts today and the first two weeks have not taken Nifty anywhere. It started off on a great note went to 10920 mark and corrected from there to 10700 and now at 10800 levels. Globally things were flat on Friday with Dow Jones closed at exactly flat terrain but Asian markets are not flat. Japan is shut today for a local festival but Hong Kong is down 350 points and all the other Asian markets are in slightly negative terrain with losses ranging from 0.2 to 0.5%. The good news for us is the Brent Crude which after touching 62 dollars has fallen again to 60 dollars but Rupee is again on depreciation spree touching 70.5 dollars.

On the domestic front, politically things are toughing up for Govt as the opposition is forming alliances in different states to fight BJP. Though its early for the market to react to this, it will always keep market nervous and affect any further movement on upwards. But the immediate news that will affect the market is the IIP news for the month of November. This number was at a dismal 0.5% compared to 8.5% seen in November 2017 and manufacturing was the bad news growing at -0.4%. Capital goods saw -3.2% growth which was the worst and consumer durables came at -0.9% and FMCG at -0.6%. All this doesn’t present a nice picture. Infosys came up with an average result better than TCS and that should cheer up the market. D mart which came up with Q3 on Saturday was a big disappointment as margins fell by 2%. So, Avenue supermarkets will be under pressure.

On the derivatives front, there were some shorts taken on the Nifty Futures on Friday and that brought the Nifty long positions down to 48% from 49% seen at the beginning of the day on Friday. On the options front, the Nifty put-call ratio fell a bit as demand for calls was more than puts. The Nifty put-call ratio fell to 1.43 from 1.46 seen at the beginning of the day. 10000 put added 1.1 lakh positions while all others shed open interest. With this, the 10500 put is at 38.9 lakh while 10000 put is at 37.9 lakh positions and 10700 put is at 33.9 lakh. On call side, 11000 call added 6 lakh positions and has 46.9 lakh open interest. So, 11000 is a firm resistance for the market.

What is the Nifty call for the day?

We will have a flat start in line with global cues around 10790-10810 zone and 10820-10850 is a resistance zone. We should see if Nifty can conquer that. I stopped you from taking any positions on Friday because of a tight range of 10750-10820 and unless that is broken there is no use of taking any positions. Today any correction might take it to 10720-10750 levels. So, its a no trade zone if Nifty is above 10750 but if Nifty breaks that 10750 and finds support at 10720 then it is better to take a long position there with 10780 as the target. If Nifty doesn’t fall below 10750 then no trade today also.

Market Trade Setup 9th January India 2019 #Nifty

Market Trade Setup 9th January

Finally, we have good news to talk about and that comes from Donald Trump. His tweet that the talks with China are progressing very well is something that World has taken very seriously and started to celebrate. Last night Dow reacted to it positively and was up 250 points. The real story, however, lies in the Asian market screen with every market showing more than 1%. Japan is up 300 points, China is up 1.2%, Korea is up nearly 2% Hong Kong is up nearly 700 points or 2.5%. All this is showing a fantastic opening for us. But one point of worry is the Brent Crude prices which are now at 59.4 dollars and now we have Crude back again at 60 dollar mark. On top of that, the Rupee also has depreciated a bit yesterday and crossed and closed above 70 per dollar. 

On the domestic front, we have few fundamentals to deal with. The Constitutional amendment accommodating 10% reservations for EBCs was passed in Loksabha with an overwhelming majority but the big challenge for Govt today lies in Rajya Sabha where the Govt doesn’t have numbers and the regional parties may create a problem and prevent Govt from conducting business. Today is the last day for Winter session and if Rajya Sabha gets adjourned without passing the bill then it will be a defeat for the Govt. Apart from that, the Q3 results start off today and we have results coming from IndusInd bank and Delta Corp. The first day is always important and IndusInd numbers which will come in the afternoon will have impact on Nifty. Finally on the back of the mind the farm package will be looming large in the mind of the market. 

On the derivatives front, there was a positive movement on Index Futures with a positive Net buy from FIIs. There was 18.8 Cr turnover from the Futures space and even the options turnover was also very good at 6.3 lakh Crore. The total derivatives turnover is at 7.28 lakh crores and the put-call ratio also went up to 1.41 from 1.36 seen at the beginning of the day. 10700 put added 3.1 lakh contracts and 10400 put added 2.1 lakh contracts and the 10500 put still has the highest open interest at 39.5 lakh contracts and 10700 is also having good open interest. On the call side the surprise the narrowing gap between 11000 and 11500 call open interests. One needs to look at it carefully because till now we were looking at 11000 and 11200 as the roof for the markets. Some people have already started believing that 11500 also can be touched. 

What is the Nifty call for the day?

Yesterday I told you that if Nifty holds 10720 levels then it is better to take a long trade around 10750-10780 levels and if you have taken that with 10820-10850 as the target then you will achieve your targets right at the start itself. Nifty is likely to open gap up at around 10870-10900 zones and 10920 can be the resistance. So, exit the positions between 10870-10920 levels and you would have made handsome profits of more than 100 points. Observe the Nifty whether 10920 holds or if the sell-off brings Nifty below 10850 or not. Nifty should close above 10850 for it to break 10920 and cross 11000 in this series.

Stock Market Trade Setup 4th January 2019 India #Nifty

Market Trade Setup 4th January 2019

The worries of Apple have consumed the NASDAQ which fell more than 3% on a single day and Apple tumbled more than 10% on a single day which is the worst performance since 2013. It lost on a single day the market cap equivalent to Infosys, TCS and HDFC. The fears that Apple cannot go any further from here has pushed US into searching who is the next Apple in NYSE. There was a time when Microsoft held that position now it’s going to be either Amazon or Netflix depending on how things move from here. Dow Jones is down more than 650 points and that send Asia on a downward spiral at the open. But after selling there is always a tendency to look beyond and that is triggering a buy, which brought almost all Asian markets except Japan into the flat territory. 

On the domestic front, the political scene has started to boil with election announcements just another 2 months away. Brent Crude is the news for us which went up to 55.7 dollars. Another major factor is the fiscal slippage that we might face and it could be as high as 1.5 times. The farm package is on the way and it could happen today or during the weekend. The rupee has crossed 70 again and this is something that is happening on the rising bond yields. All this is due to the fiscal management and till the time there is clarity on this, Rupee and bond markets will continue to be in pressure. 

On the derivatives front, yesterday was a very bad day for Nifty as it lost nearly 120 points. The F&O trade was worth 18.8 lakh crore yesterday out of which Index options accounted for 17.9 lakh crore. Index futures also had 2.97 lakh contracts most of it were short positions on Nifty. With this, the overall long positions came down to 48% at the end of the day from 50% seen at the beginning of the day. The Nifty put call ratio also fell to 1.34 in the evening from 1.47 seen at the beginning of the trade. The biggest factor to consider was a 11.1 lakh contracts disappearing from 10500 put and the open interest stands at 39.7 lakh and 10000 put added 4 lakh contracts and the open interest there stands at 32.2 lakh.

On the call side 11000 is consolidating itself as the strike with highest open interest and has 39.1 lakh contracts and yesterday itself it added 8.2 lakh contracts. 10900 call added 7.5 lakh and 10800 call added 6 lakh contracts. 11200 which was the highest open interest till yesterday is now 2nd with 32.2 lakh contracts. So, its 10500-11000 is what the range seems to be. If there is a decline in Nifty today the 10000 put will add more open interest an that would mean the downside will start opening up for 10000 also. On the call side, 10800 is building up as a call that can replace 11000 call too.

What is the Nifty call for the day?

Yesterday, I started you to stay out of the market and for a bull it worked perfectly. There would have been no way that you could have made profit yesterday. We will have a flat start today around 10670-10700 levels and on the downside 10620-10640 will offer as strong support. Nifty will really need a very bad fundamental to breach this level and on the upside 10780-10800 is the resistance with an intermediate resistance at 10750. So, my call for the day is if Nifty holds 10650 then it is better to initiate a long trade anywhere above 10650 to 10710 levels with 10750 to 10800 as the target. The ranges are very huge because the market itself is very volatile.

Market Trade Setup 28th December India #NIFTY

Market Trade Setup 28th December

Markets welcome 2019 3 days ahead with the start of the January series. 2019 for me is the year of the decade as well as the entry point to next decade. The year has so many cues to look forward to and the most important being the General Elections scheduled in April and May that could define the country’s progress into the 3rd decade of the 21st century. On the global scenario, Dow Jones has shown a 900 point volatility were it fell 600 points and then rose above to close 250 points higher than the previous day. There is so much confusion about US entering into bear territory in 2019 and the market is just not able to decide where it goes.

The China factor is weighing heavily in everyone’s mind and Asian markets are also like US markets, very volatile. Japan is down nearly 200 points while Hong Kong is up just 20 points. That’s a very uncertain January start globally.

On domestics, this 2019 is crucial for us much more than any country in the world as we go for a general election. 2018 was a year that went to bears 7-5 as Nifty remaining in a flat zone. The year started with Nifty at 10500 levels and now we are at 10800 level which means in the entire year we just moved 300 points which is just 2.5%. However, in 2018 we have seen a high of 11760 and a low of 9951 and right now we are almost in the middle.

On the macro news, the Fiscal deficit of 115% for April to November period is a big negative that will hit the market, especially bond markets. Now it is clear that Govt is not going to stick to its fiscal deficit targets and that is something we will have to negotiate today. 

What to expect from the January series?

If we look at the last 5 January series we have 3 January series that went positive and 2 January series that went negative. 2014 and 2016 January series were negative and 2015, 2017 and 2018 series were positive. The last two January series have seen a 500 point jump on Nifty. So, what does this January holds needs is to be seen. The rollovers from December to January were at 74% which is highest in the last 2 months and higher than the average levels also. The Nifty put-call ratio is also at 1.54 which is looking very bullish versus 1.39 that we ended the December series with. 10500 on the put side and 11000 on the call side are the markers seen. But we also need to watch out for 10800 put and 11200 call as there could be some open interest that can be built if Nifty goes up. 

What is the Nifty call for the day?

There will be a positive opening for the market where Nifty will open around 10830-10850 levels and being the first day of the series it is always going to be positive. On the upside 10920 is the resistance and 10820 is the support. So, I suggest taking a long position anywhere between 10830-10850 levels with 40-50 points as the target looking at the possible resistance zone of 10900-10920 levels.

Market Trade Setup 18th December #Nifty

Market Setup 18th December

The big global fall is on. After consolidating a bit, Dow Jones fell by another 500 points last night with all 30 stocks in Dow ending in red. There are two factors contributing mainly for this global fall. The FoMC meeting is on for the last time in 2018 and amid the fears of global growth scare, the Fed might still go in for a 25 bps rate hike but what is more important is the commentary and the subsequent outlook for 2019. It is widely believed that Fed will go for a Dovish tone and Asia has its own problems to deal with. Bad news is coming from China and US-China trade wars are hitting both nations. Asia is in red due to all this and this will surely have some impact on us also. 

Coming to domestics, we dont have many macro factors to deal with as everything seems to have settled down and we will only react to global factors and the technicals. The Rupee has strengthened a bit yesterday and moved away from going to 72. It closed 35 paise stronger yesterday at 71.53. Brent crude also has a dramatic fall and it’s now trading at 59 dollars and the out put cut announced by OPEC has almost no impact. On the global factors, India has been performing better than Asia and how long would we continue needs to be seen. One has to be very careful and we should not fall dramatically in the last leg of a global fall. This has happened twice before in the last 2 years. We need to look at technicals to see if we can fall. The 20dma is at 10710 and that should offer a support to any fall. 

Coming to derivatives, there was some action in the futures market and there was some buying seen in Futures. This took the overall Nifty long positions to 47% from 46%. In the options market also the Nifty put-call ratio surged to 1.61 from 1.53 on the back of a lot of action in puts. There were more shorts taken than longs in options and it was 5 shorts for every long. 10900 put added 9.2 lakh positions while 10800 put added 8.4 lakh positions. There was unwinding in other strikes but still, 10000 put has highest open interest. 10500 and 10800 puts are also picking up open interest. On call side 11400 call added 3.4 lakh positions and that is surprising. 11100 call also added 2.6 lakh positions. 11000 call still has the highest open interest followed by 10900 call.

What is the Nifty call for the day?

My call yesterday for buying above 10780 below 10850 with 10900 as target went picture perfect and you would have made the profit on this. Today, red Asia means we will open around 10850 level and now 10920 is emerging as a resistance to break. So, if there is a drop below 10850 and if Nifty sustains 10800 level then go for a long position with 50-60 points profit on the upside. In case Nifty doesn’t go below 10850 and remains in the range, then it is better to stay out of the market for the day.

Market Trade Setup 3rd October #NIFTY

Market Trade Setup 3rd October

Thank God we did not trade yesterday, thank god it was Gandhi Jayanti. Brent Crude went to a high of 85.45 dollars and dollar index went to 95.5 from Monday’s value of 94.5. That would mean Crude at 85.45 and Rupee would have reached 73.5 and that would have spelt disaster on Nifty and it would have lost another 100-120 points. But thank god, all this was saved as we were on a holiday. Today as we open things are bit settled with Brent Crude at 84.95 and Asia in mild green and Dow Jones closing 120 points so all this might put some losses to rest.

On the domestic front, things are not looking great here also. The GST collections for the month of August come at 94,000 Cr vs expected 1.1 lakh crore and that is definitely not a good news for Govt which is looking for some revenues to stick to 3.3% fiscal deficit. The auto sales for the month of September also has been disappointing on the back of lower demand and Kerala floods impacting consumptions. The 3 day MPC meeting to decide the monetary policy rates would be commencing today and on Friday we will have the rates coming out. The consensus estimate is a 25 bps rate hike.

On the derivatives front, Monday was a great day for bulls as the premium on Nifty futures has doubled from 28 points to 55 points and the overall long positions in Futures shot up from 46% to 48%. The options market also was going good with Nifty put call ratio surging from 1.33 to 1.41. There was more of call buying, with 2 calls bought for every put and in selling nearly 5 puts were sold for every 2 calls. 10700 put added maximum open interest of 10.6 lakh contracts while 10500 put added 8.8 lakh contracts taking the accumulated open interest to 30.3 lakh and 10800 put is at 31.9 lakh. Any drop in Nifty means the base for the market will shift from 10800 to 10500 which means we could go to 10500 in this series. Not a good sign. 

What is the Nifty call for the day?

Though Asia is looking green, we might open flat to negative between 10960-10980 levels because of yesterday’s trade not being there. What happens after that, with Crude almost touching 85 dollars and Rupee at 73 needs to be seen. Rupee for sure will open above 73 per dollar and soon we might see it going to 73.20-73.30 levels. That would put immense pressure on Nifty and Bank Nifty. I would not suggest any position but would advice you to wait and see what happens. 10880 is a strong support and I want to see if Nifty would touch that today. On the upside 11150 is a resistance.

So, its a very wide and volatile range, so no trade today, just try to see which direction Nifty goes.

Market Trade Setup 9th July #Nifty

Markets and News

The second week of July starts off with a lot of promise and the feeling of leaving sticky things behind. The trade wars are history now with both US and China imposing some sanctions on each other but both know that they needed for each other. The reaction was Dow was up 100 points on Friday and the jobs data of US comes at a strong 2.13 lakh vs expected 1.95 lakh and that kept US higher. The Crude oil remained steady at 77 dollars and the Asia is trading higher today with Hong Kong up by 500 points and Japan up 300 point gain and Shanghai after falling for almost a week have seen a 1.5% gain.

Domestic Cues

On the domestics, a lot of data is coming this week. The Q1 earnings season is starting this week with DishTV which is coming up with its results today and IndusInd bank will come with their Q1 tomorrow along with the IT major TCS also declaring its Q1 tomorrow. Then the next big day is 13th July, Friday when another IT major Infosys will come up with their Q1. Along with this the two macro data points IIP and CPI for May and June will be released on 12th July. So, these are some of the fundamentals that market has to absorb in this week.

Derivatives Action

Coming to derivatives, Friday saw a lot of action on puts and calls as the market crossed 10800 to go up 10816, puts were in demand and once the market started falling in the last hour calls came into play. The overall long positions in Nifty futures just went up 1% from 40% to 41%. The options market saw much tighter positions with Nifty put call ratio remaining constant at 1.51. 10700 put saw 5.4 lakh contract build up and 10800 put saw 4.6 lakh contracts. On the call side 10800 call saw 3.5 lakh contracts and 11100 call saw 1.2 lakh and 11300 call saw 1.8 lakh contracts. The build up in the 11100 and 11300 call shows that some big move on the upside is expected sometime in this series.

What is the Nifty call for the day?

The green in Asian markets mean that we will open at around 10820 levels which is the Friday high as well as this series high. What happens from there needs to be carefully observed. A lot of call shorting happened at 10800 and that call is at 100 rupees and that means Nifty temporarily has legs to go till 10890 and if that is the case then it would be advisable to go long at 10810-10830 levels with 10880-10900 as the target. This is a target that you might have to keep for a week if Nifty takes time to climb this. But there is no opportunity for shorting and shorting might not be a good idea.

Market Trade Setup 31st May #Nifty

Markets and News
Last day of the month, coinciding with the last day of the series!!! How many times it happens this way? Another point to note is after 2 series going to bulls and 2 series to bears, this series is considered to be the tie breaker but this series itself is going towards a tie breaker. This series started at 10618 and now the market is at 10614 that means its just 4 points down. So, nobody can say at the end of the day, will bulls take this series or the bears. This series also was volatile with the highest going to 10929 on Karnataka results day and quickly slipping to 10418. So, we had a range of 500 points but its closing the series absolutely flat. That is why on the starting day of this series I suggest a long straddle and that should have given some profits to you.
Coming to the World markets the Dow jones closed 300 points up as the fears of Italy and temporarily put back and that has cheered up Asia as well. The Brent crude however climbed again to 77 dollars per barrel and that means the chances of a fuel cut is also receding. Oil companies are not in a mood to allow the rates to fall as in the last 15-18 months they suffered huge losses on the back of US shale gas and low demand for the crude. Many economies like Iran, Saudi Arabia and Venezuela had to bear the brunt of lower crude prices. So, expect the crude prices to remain steady around that 75-80 dollar mark for the time being.
Domestic Cues
On the domestic front, Q4 results have ended and today is the day for the Q4 GDP and FY’18 annual GDP and GVA growth rates to come out. The expectations are positive everyone is expecting a 7.4% GDP growth and if you ask me I would say that it could be higher than 7.5% and as high as 7.8%. After 5.7% in Q1, 6.5% in Q2, 7.2% in Q3 we are averaging 6.4% and if we get a 7.5% also we can touch 6.7-6.75% growth which will be just 0.4% less than 2016-17 fiscal growth of 7.1%. CSO and RBI are predicting a growth rate of 6.6% and the numbers will be out by 5.30PM today after the markets close. In other news, ICICI bank will be in some risk as there is an internal enquiry ordered to investigate the quid pro quo charges levied against the Chairman and CEO, Chanda Kochchar. It might have some impact on ICICI as well as bank nifty.
Derivatives Action
Derivatives are important today as the expiry day is all about playing with options. The rollovers to June are at 42% as on yesterday evening and we need to see how markets pan out today. The put call ratio is stuck and it is 1.39 at the end of the day vs 1.40 seen at the beginning of the day. There are equal number of positions created and unwound at the put and call side. 10500 put added 7.9 lakh contracts and that means 10500 will be the firm floor for this series and on call side 10600 call has 6.6 lakh contracts and at 30 rupees premium 10630 might be the temporary roof but 10650 call also hs 4 lakh contracts at 12 rupees premium meaning, if Nifty approaches 10650 then it can go upto 10660 mark.
What is the Nifty and bank Nifty call for the day?
You have two positions open in Nifty already. The naked short put will give you the premium and the short straddle also might work out in your favour today. Because of the slightly positive Asia, Nifty might open around 10650 and there it might get some resistance. so, we need to see what happens there. So, wait for my tweet during the day for taking further positions and avoid bank nifty as there is a lot of fundamental confusion in ICICI bank.

Market Trade Setup 30th May Nifty

Markets and News
Penultimate day to expiry, and things are looking very very bleak. Italy is the worry for the whole world. Italian results were like Karnataka results with no party getting a clear mandate to rule. Now with no coalition emerging to form the Govt, we are staring at a scenario where Italy might go to polls or a scenario where the coalition that comes to power might pull out of Euro. Out of the 630 seats in Chamber of Deputies Right centre party got 265 seats, Left centre party got 122 seats and Centrist 5 star movement got 227 seats. No body touched the 316 mark which is the majority. Even in the senate that has 315 seats Right centre party got 137 seats, Left centre got 60 and centrist party got 112. 158 is the majority figure. This is the reason why World is afraid of Euro. Yesterday Dow fell more than 500 points before recovering a bit and close at 400 points down. That prompted dollar index also to go up and its almost touching 95 now. That has put pressure on many emerging economies.
Domestic Cues
On the domestic front, the Crude prices have stabilized a bit and Brent crude settled below 75 dollars and that prompted Govt to reduce the petrol prices today after 15 days of continuous rise from 14th of May when voting completed in Karnataka. The Q4 results have also come to an end and things are looking slightly better than the previous Q4 results as well as the Q3 results. So, domestically things are looking positive but with global cues so negative these fundamentals have no role to play in today’s market scenario.
Derivatives Action
On the derivatives front, there is a massive change in the mood and sentiment in the later half of the trade as market started falling yesterday afternoon on Italian fears. Nifty went into a deep discount of 9 points and suddenly the rollovers from May to June shot up and ended at 30% now. These are on the back of low premium for Nifty futures. On the options front also the Nifty put call ratio dropped rapidly to 1.40 from 1.52 and it is again due to unwinding of positions on put side as market approached the 10620 level. 10500 put saw unwinding of 11.6 lakh positions.
What is the Nifty and Bank Nifty call for the day?
Asia has reacted very negatively to the Italian situation and every market there is down. As a result, Nifty also will open gap down below 10600 mark and what happens from there needs to be seen. 10490 is the floor for the series, as appears from the options data and it is better to go for short strangle at 10500 put and 10650 call and whatever is the premium will be tweeted to you once the market opens.
On the bank Nifty front, after a big fall, and the gap down expected, it is better to go for a long position on bank nifty intraday, but wait for my tweet for a clarity on this.