Tag Archives: Trade Setup

Market Trade Setup 10th April #NIFTY

Finally, there was a rally in the last hour yesterday much to the relief of many, who were doubting whether Nifty would cross 11600 or would settle down below that but somehow we managed to cross 11600 and went up all the way to 11685 levels and closed almost at the high point of the day at 11671. Globally, however, things are not looking that great. US markets corrected close to 200 points and this is on the worry that came from IMF which has cut the global growth forecast and that seems to be having a major impact across all markets. Added to this is the Trump tweet which talked about imposing trade sanctions, this time on European Union. Asia is also negative today mainly on the IMF growth cut with both Hong Kong and Japan showing 150 points cut each.

On the domestic front, the campaigning for the first phase of elections finally came to an end and a positive close was mainly due to the positive outlook given for NDA that it might come back to power. India Today was the last channel to come up with the forecast and they gave a figure of 263-283 seats for NDA and surprisingly in UP BJP might get 42 seats which was much better than 20 plus seats forecasted 2 months ago. BJP is also doing well in Maharashtra with 40 seats almost the same as what they got last time. The other news today is going to be the IIP and the CPI data that will be released for the month of Feb and March. CPI for March is expected to be around 3% and if it comes in that range it will be a good trigger to look at another rate cut in the June policy of RBI.

On the derivatives front, there has been some selling in the Futures market in the last 2 days which has brought the Nifty futures long positions to 67% from the highs of 71%. This is in a way good as now there are 1/3rd shorts in the system. The options also has seen some trimming of Put call ratio and the Nifty put-call ratio right now stands at 1.42 which is a good level considering that tomorrow is the weekly expiry. Yesterday 11600 put added 5.3 lakh positions and that established 11600 put at the highest open interest which means we have firm support at 11590 levels. On the call side, 11850 call added 6.4 lakh positions and 11800 call has the maximum open interest followed by 11850 call. So, Nifty now has the legs to go up to 11800 by tomorrow. The range is now 11600-11800 mark.

What is the Nifty call for the day?

The positions that you were holding for last 2-3 days finally would have got closed yesterday as Nifty went all the way crossing 11680 mark and that you would have made a 20-80 point profits depending on where you have taken positions. But what is important is that a futures trade is closed, which is very important for small traders. Today the IMF news will give a dip at the opening and Nifty might open around 11620-11650 mark and that also is the support zone. Any correction will bring it to 11590 and Nifty should find a support there. So, it is better to go long at around 11600-11630 mark with 11680-11700 as the target. You can otherwise keep a 50-70 point profit target which can be anytime this week

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 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 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.