Tag Archives: Trading

Market Trade Setup 19th February #Nifty

Market Trade Setup 19th February
The second half of expiry starts off on a disappointing note when the whole world was rallying. Nifty lost nearly 70 points and closed below 10650 which is below all the moving averages, the 20, 50, 100 and 200 dma. The last standing value was 100dma of 10690 which was emphatically broken yesterday. There was no doubt that we were on a downward spiral but where exactly it ends needs to be seen. Yesterday US markets were shut due to President’s day and today Asian markets are in mild green with Hong Kong 60 points and Japan, Shanghai and Korea are absolutely flat. Brent Crude seems to have stabilized at 66 zones and its trading at 66.1 dollars now.
On the domestic front, the big news is the RBI interim dividend of 28,000 Cr given to the Govt. There is a big debate going whether the new RBI Governor was too kind to Govt but if you look at the history the 3 years of Rajan saw an average of 60,000 Cr and its only after that we had some dividend kept as reserves. But now the question is should any money be kept as reserves or the entire excess amount be given to Govt. The conclusion is its left to RBI to decide. So, this fiscal Govt got 78,000 Cr with 50,000 Cr coming in August and 28,000 Cr coming now. In other news, Ambuja cements one of the last companies to come up with its Q3 has disappointed and thus officially the Q3 calendar is over for now.
On the derivatives front, there was selling yesterday also by FIIs and now in the last 6 trading sessions, FIIs were sellers. The overall long positions now stand at 45% for Nifty and on the options front there was a massive demand for calls and that took the Nifty put-call ratio to 1.13 from 1.30. Now we have been falling from the last 7 trading sessions and we lost 430 points in last 7 sessions. Now 10400 put has established itself as the strike with highest open interest as 10700 put which was ahead of 10400 lost 5.1 lakh contracts in unwinding. On the call side 10800 call is also picking up open interest and soon we might have 10400 as the support and 10800 as resistance for Nifty.
What is the Nifty call for the day?

We can’t look at the world and trade because the market is on such a downward spiral that you have nothing to trade as a bull. Now with no moving averages offering support, the only support zone we can look at is 10530-10550 zone which are the lows that Nifty made on December 11th when BJP lost all three state elections and on 26th December. Now we need to see whether we find support there or not. For today we might open between 10650-10670 and if there is shorting at 10700-10720 zone we will fall again. Yesterday’s low of 10620 might offer as a support. If that doesn’t hold then we are on our way towards 10550 zones. Today also its AVOID and see whether Nifty stabilizes or not. Stabilization is when Nifty closes in 10680-10700 range.

Market Trade Setup 15th February 2019 #Nifty

A tough week is coming to an end with a very sad news coming from pulwama where 44 of our brave soldiers were martyred in a suicide attack of terrorists from across the border. India has promised a befitting reply at a place and time of its choosing. This brings a lot of uncertainty into the market which will be worried about the kind of reaction and its consequences. Globally also things are not looking good where growth fears are back again and Dow Jones lost 100 plus points last night. Asian markets are in red with Hong Kong down 400 points, Japan down 250 points, Shanghai and Korea in mild red and only Taiwan in flat to green. Brent crude is also a cause of worry which is now at 65 dollars which in a week gained 4 dollars. 

Domestically, Yes bank was a star performer yesterday with a largest ever intraday gain for itself of 31%. Imagine a stock going up 31% on a single day, that’s what one clean chit from RBI can do. Another positive we can look forward to is the Jet Airways restructuring plan. Finally a restructuring plan seems to have worked out where the majority of 51% of stake in Jet will be held by the promotors and Naresh Goyal whose stake is 51.5% now is like to come down to 25% and Etihad which has 24% stake is likely to come down to 12%. Q3 results seem to be mixed with Nestle disappointing again, for Nestle which follows calendar year its Q4 results. Pharma company Glenmark was a relief which reported 11% rise in sales while MTNL, Jet Airways, Voltas were a disappointment. 

On the derivatives front, yesterday was Nifty weekly expiry and there was so much selling yesterday even in the monthly series that the long positions which were at 55% came down to 49% by evening. This is something which is very rare. Contrary the Put call ratio went up to 1.35 from 1.29 on the back of short put positions that got created. The first weekly expiry on Nifty and Bank Nifty clocked 15.89 lakh Crore turnover which is almost equal to the monthly expiries. So, the expectations that volumes will go up has actually come true. 10600 put added 3.8 lakh contracts and 10700 put added 3.5 lakh positions and 10700 put now has the highest open interest which means 10630-10650 is the support for this month. On the call side 10800 call added 8.2 lakh positions and 11000 call has the maximum open interest. 

What is the Nifty call for the day?

Today is Friday and the cues across the globe are not that good. Even the domestic situation is challenging with market worrying what kind of retaliatory action India will come up with in pulwama. Brent crude also is at 65 dollars and all that means we will open in 10740-10760 range and we need to see if 10750 holds or not. If 10720-10750 doesnt hold and Nifty slips below that before 12 then its a warning sign to stay off. I know that you have not traded for almost a week but these are testing times and we need to hold on and wait for the right opportunity. If by 3PM also Nifty manages to hold 10720-10750 then you can venture into taking a long position, but remember that a lot can happen over the weekend in Kashmir which will have an impact when we open again on Monday. So, its all looking very risky indeed.

Market Trade Setup 12th February 2019 #nifty

Market Trade Setup 12th February 2019 #NIFTY

A weak start to the week is what we have seen yesterday. The 125 point fall on Friday was followed up with another 50 plus point fall yesterday and that took the Nifty back to sub 10900 levels and now worries are emerging where the Nifty will go from here. Last night Dow Jones also corrected 50 points on the back of non resumption of US-China trade talks and the US Govt Shut down that’s gone into 7th week now. But the main factor remains the worry that the US might go into recession in the last quarter of 2019 or early 2020 which is what is being predicted by many analysts. Brent Crude still remains below 62 dollars and Asian markets are mixed today with Japan Up 400 points and Hong Kong down more than 120 points.

On the domestic front, Q3 results continue to disappoint, especially the automobile sector. Eicher motors came with disappointing numbers and they have reduced the guidance for this year. The effect is shown on the auto ancillaries also where Amararaja batteries has slipped to single-digit growth and now projecting a sub 5% growth for the coming year. Apart from that, some macro data is also expected today with December IIP numbers coming today. It is expected to be in 2.2-2.7% range which is better than 0.5% seen in November. The January CPI inflation data is also coming today and December saw overall inflation at 2.1% and services inflation at 5.7%. This month I am expecting it to be in 2.0 to 2.4% range with services inflation falling a bit to 5.4-5.6%. Both the data will come at 5.30PM today and we will have their impact on Nifty tomorrow. 

On the derivatives front, the first day of the weekly Nifty option had received a fantastic response with 38.8 lakh open interest on call side and 31.1 lakh open interest on put side. That means the put call ratio will be less than 1 but that is mainly because Nifty closed in red yesterday. 6.3 lakh contracts got created for 10800 put and 9.7 lakh contracts got created for 11100 call. So, this week we are looking at 10800-11100 range for Nifty. But if we look at the Feb series the highest open interest on put side is at 10400 level and on the call side, it is at 11000 level. The Nifty put-call ratio fell further from 1.59 at the beginning of the day to 1.47 at the end of the day. Index options saw 4.4 lakh crore turnover yesterday taking the overall value to 5.46 lakh crores. 

What is the Nifty call for the day?

We need to look at the Nifty movement from weekly as well as monthly point of view. For this week, support comes at the 10800 level and the upside goes all the way up to 11100. We might open today on a flat to negative note around 10860-10890 levels and 10820-10850 is a strong support zone. If Nifty goes there then it will present a good opportunity for you to take a long position with 10880-10920 range to exit. The target can be reached today or tomorrow. If Nifty goes below 10820 and 10800 then do not take any long positions. Longs should be taken only if Nifty holds 10820-10850 range.

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 Trade Setup 30th January #NIFTY

Market Trade Setup 30th January

Penultimate day for the expiry, and what a day we had yesterday! There was a time when nifty broken 10600 and that gave shivers to bulls but then there was a dramatic recovery in the latter half of the day and we had conquered 10650 and just closed above that. This is one positive signal for bulls going into the expiry. Global markets were almost flat with Dow gaining just about 50 points but NASDAQ lost 70 points. The Asian markets are trading in the mixed terrain today with Korea and Singapore in positive while Japan, Hong Kong and China in slightly negative territory. Brent Crude again climbed to 61 dollars, trading at 61.3 dollars per barrel.

On the domestic front, there is a lot of politics playing around with Rahul Gandhi coming up with a minimum guarantee scheme for the poor. That would approximately work out to 650 rupees per month per family and that would cost 2 lakh Crore for the Govt. BJP fired the Ram temple salvo by requesting SC to handover the undisputed 67-acre land to Ram Janmabhoomi trust. Amidst all this, there was a positive cheer on Q3 results, with Bank of Baroda and HDFC coming up with a very good set of numbers. This is a huge relief. Today’s Q3 results include Bajaj Auto, BEL, Castrol India, Heritage foods, ICICI Bank, Indian Oil Corporation, Jubilant food works, LIC housing finance, NTPC, Tata communications and Torrent Pharma.

On the derivatives front, the put-call ratio of Nifty remained more or less intact at 1.21 vs 1.23 at the beginning of the day and there was the unwinding of positions that was seen both on the call side as well as the put side. The index options saw 6.55 lakh crore turnover and that took the total F&O turnover yesterday to 8.55 lakh Crore and we are looking at a 10 lakh crore turnover today. 10650 put added 2.9 lakh positions while 10800 put saw 6.3 lakh contracts unwinding. On the call side, 10600 call added 4.3 lakh contracts while 10700 call added 4.2 lakh contracts. 10500 put still has the highest open interest, close behind are 10600 and 10700 put. Today will be an interesting day where we will see where we could see some decisive open interest build up. On the call side, 11000 call is firmly placed at the roof.
What is the Nifty call for the day?

Two days running you were not doing anything and I will surely give you some options strategies to work with once the markets open and premiums settle down. Watch out for my calls on Twitter. Coming to futures trading, there could be a flat open for Nifty between 10640-10670 zone and 10720-10750 can be the destination today. On the downside, 10580-10600 will be strong support. There is a 30 point additional premium on Feb futures and I suggest you to take a long position on February futures as January expires tomorrow and you would be taking a huge risk if you play with Jan series. Enter a long between 10620-10650 spot and keep a target of 10720-10750 on spot prices. That would give you a profit of 60-80 points. 

Market Trade Setup 24th January #Nifty

Market Setup 24th January

What a boring January series it’s turning out to be. A 35-day series which has 25 working days, even after 20 working days, Nifty has still not moved anywhere. We are still at 10800 the place where we started this series. We didn’t move much on upside or downside also. We went to 10700 on the downside and 10900 on the upside. So, all that we had was 200 point movement in 20 days where practically no profitable trade is possible. US markets were again up by over 150 points yesterday on domestic cues. Asian markets opened up mixed, mainly on their own country’s factors and there is no big global factor that is affecting them.

On the domestic front, there is some worry on ITC front yesterday and the results were really not upto the mark. The last 1 hour fall in Nifty was mainly led by the fall in ITC. On the other hand Bharti infratel came up with good set of numbers and that will mean some light seen at the end of the tunnel for telecom sector. In other news Brent Crude which went to almost 63 dollars has now come back again to 60.8 dollars and that will be the relief for Govt. Following are the Q3 results expected today: Biocon, Colgate, Edelweiss, ICRA, Jindal SAW, Pfizer, PNB housing, PVR Cinemas, Sintex, VST industries, Yes bank. 

On the derivatives front, one point that needs to pay attention to is Premium of Nifty futures going up as Nifty was going down. At the beginning of the day premium was 13 rupees which surged to 23 rupees by the end of the day. This shows a lot of buying happening as Nifty was falling. So, its indicative of some movement in the upward direction. On the options front, the Put-call ratio is at 1.43 now down from 1.53 seen at the beginning. Surprisingly, 10800 put now has the highest open interest followed by 10500 and then 10700. Does that mean that we have reached the floor and on the up move now? 11000 call has huge open interest and 10900 is second. 

What is the Nifty call for the day?

It was good that we didn’t take a trade yesterday and stayed out. Today we will open in 10830-10860 range and there is a lot of support coming in at 10780-10800 levels, so markets might go up taking support there. So, I suggest you to take a long position at and a level below 10850 with 40-50 as the target. 10890-10920 is the cut-off point. It can be taken to the next day also if the target is not met.

Market Trade Setup 11th December #NIFTY

Market setup 11th December

What started as global growth fear has escalated into a huge domestic scare with a series of events yesterday pulling Nifty down more than 200 points and we have cues today that can take markets another 200 points down or wipe out all the losses that we got yesterday. The US has finally recovered from the losses that were made till yesterday and closed almost flat. Asia is also in the flat to green just like the US market but India will not be bothered about all that. It will also not bothered about the fact that Brent Crude has reached 60 dollars per barrel. India will have its own fundamental and that fundamental is Urjit Patel and 5 state elections.
 
Coming to domestics, its the election results day and the exit polls suggest a 2-1 victory of Congress in 3 states and markets were factoring in 1-2 for Congress. A 3-0 win for Congress could result in another 200 point fall. A 3-0 win for BJP would mean all the losses that Nifty made yesterday will be wiped out.
 
So, you have a lot of volatility and a lot of things to look for. Added to this is Telangana where though BJP has nothing directly, but indirectly if TRS fails to get a majority then it could come in the picture as it has already offered to support TRS. Mizoram is the last Congress state standing and a loss here would mean we have a congress mukt Northeast. A 3-0 loss to Congress means we will almost have a Congress mukt Bharat except for Punjab and Karnataka where it’s in a fragile coalition. Urjit Patel resigning might be a news of the past and we will talk about it some other day.

 

What is the Nifty call for the day?

We cant even predict the open as everything depends on the election trends. As of now Congress is in lead in Rajasthan and Madhya Pradesh while Chattisgarh is going tight. This is just postal ballots so we cant conclude anything from this. I present two scenarios here. Scenario one where if Congress is sweeping the 3 states, wait for the reaction to get over and allow Nifty to fall another 200-300 points and look to enter with a long position then. The other scenario is where BJP is winning then you can enter into a long position quickly. You can wait for my updates as the election builds up. For now, just watch the results.

Market Trade Setup 30th November #NIFTY

Market Trade Setup 30th November

December series has finally started and we have started on a fantastic note which pushed Nifty up 743 points making it the best series in 32 months!!! Though on the last day my call ended on a losing note am not complaining as we have made a lot of money and Nifty also went up. Winning and losing is a part of the game but its the trend that matters most. December is starting with G 20 summit, where Trump and Xi-Ping are meeting and this US-China trade talks will be the big focus. Everyone is eagerly waiting for this and our PM, Modi is also there and likely to hold talks with the US and Chinese presidents. The US closed flat on this news and today Asia is also trading mixed to flat anticipating which way the trade talks go in G-20 meeting in Argentina. 

On the domestic note, today is also the day when the GDP figures for the Q2 will be out. Though the results will come after the market hours at 5.30, market will have some anticipation as to where the number might come. The IIP numbers for Q2 came in at 6.5%, 4.7%, 4.5% in the three months which is almost same as Q1 months but the major factor is the corporate results of Q2 that came in almost flat at 2% compared to 12% seen in Q1. This according to me could be the crucial factor. Q1 has seen a GDP of 8.2% but matching that in Q2 is going to be tough. Q1 figure of 8.2% came from lower base of 5.6% seen in Q1 of last fiscal. The Q2 figure in last fiscal was 6.3% and that makes the base bit tougher so considering all these factors I can expect a GDP of 7.2-7.5% and agriculture GDP is going to be crucial and that could change things. 

What to expect from the December series?

Finally December series is here and last three december series have been positive with gains ranging from 1% to 2.5% and we had a 7% gain in November and will December also follow it up with same gain or not needs to be seen. The crucial factor is the election results on December 11th. Like Diwali which came at the mid of this series, election results also are coming at the mid point. I would thus like to divide this series pre results and post result part. If there is an uptrend till 11th then we might see some sell-off post the series. 

10500 put and 11000 call have the highest open interest to start with, but 11500 also has a good amount of open interest and so does 11200. So, the first part of the series if there is a rally can go to 11200 or even 11500 levels. Similarly, if there is a fall then we can test 10500 levels and in worst case 10200 levels. The series is also starting with 51% long positions vs 29% in November so there are more longs than shorts in the Futures market. The Nifty put-call ratio is also starting off at 1.72 which is over the heated zone and the overall roll overs from November to December is 71% which is higher than the average of 68% seen for the year 2018.

What is the Nifty call for the day?

Today is the first day of the series, Nifty will open bit gap up at around 10870-10900 levels and where it goes from there needs to be seen. There are too many fundamental factors affecting the market so for me today will be a wait and watch day. No positions to be taken, even if you see Nifty moving to 10950 after open. Keeping money safe is better than losing it taking risks. 

Market Trade Setup 29th November #NIFTY

Market Setup 29th November

Finally, we are on the expiry day for the 11th series of this year. What a way to end the series that started at 10070 levels with a big doubt on which direction the market will go. There were many who talked about 9500 levels and historically November was not a good series. Added to that is the Dovish statements by US Fed where they indicated that the interest rates would not be disturbed that much and they would observe the growth bit more carefully has pushed the Dow Jones up more than 600 points and the Asian markets are in the green. Added to that is the Brent Crude which as now fallen to 58.8 dollars on the back of Saudi Arabia which is refusing to cut the output.

On the domestics, the behaviour of the market from 2PM yesterday, we have seen a rally which indicates that BJP has done reasonably well in Madhya Pradesh and has pulled itself well in Malwa region where Congress was expected to make some gains. The SGX also is suggesting a 90 point growth which is 0.8% higher while Hong Kong and Japan are up 0.2 to 0.4%. This also says that the final unofficial numbers that would have come after market hours would have gone decisively the BJP way. Today is the expiry and so its the expiry factors that would play a major role. There was some re-casting done on GDP which I would keep it for later date.

Coming to the derivatives market, yesterday was an out and out bullish from afternoon and the Nifty put call ratio is at 1.81 which is now the bubble zone and on the expiry day it is usual. The series will come to an end today, so this is not a major factor. As predicted yesterday 10800 emerged as the strike with highest open interest on the call side and on the put side a lot of confusion is emerging and 10600 which remained till 2.30PM has given up and today it might again come back. But things are going to change rapidly when there is a gap up of 80-90 points that happens now.

What is the Nifty call for the day?

November series so far has seen 603 points gain and that means this is series belongs to bulls and now it is 6-5 in favour of bulls. The opening today is going to be at 10800 level which is where lot of short positions were taken and any expiry above 10810 level means lot of people will lose money. So, we need to see what happens between 10810-10830 zone. If there is a fall then 10750 might come as a support.

Following are the possibilities that can be visualized now

1. Opening at 10800, Nifty being in 10780-10830 zone till afternoon and a big 3PM move down to 10750 and an expiry at 10780 levels. This looks most probable now.

2. Opening at 10800, Nifty going to 10850 levels and then a 3PM move to 10780 and a close around 10800-10810 levels. 

3. Opening at 10800, quick fall in Nifty to 10750, spend rest of the day between 10750-10780 zone and 3PM move on upside taking Nifty to 10830 and close around 10800-10820 zones.

4. Opening at 10800, quick fall to 10750, spend rest of the day between 10750-10780 and a 3PM move down to 10720 and close around 10740 levels.On the back of these, I suggest you to keep the short strangle intact and dont take further positions. Today might not be as exciting as other expiry days are going to be.

So, I suggest no trading today, just observe and see how expiry pans out.