North East Financial Market Wizards

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04/03/2021

Market Mantra

US markets fall as technology stocks lead the downturn with Nasdaq down over 4% in 2 days. Dow Jones sees intra day swings of over 400 points before closing down 120 points. Bond yields rise again to 1.49% as markets see higher cost of money with Federal Reserve expanding balance sheet for further stimulus.

Asian markets opened in the red led by the Japanese Nikkei, which traded lower by over 400 points in early trade. The other markets will also see pressure on prominent winners as markets look to rotate out of technology stocks & into cyclicals with volatility index also seeing highest close in over a month. Chinese stocks will also see volatile moves as Hong Kong index sees change in composition with Chinese listed stocks seeing changes.

The Nifty saw another superb session with banks leading the short covering/value buying day as the index closed higher by over 325 points or 2%. Bank Nifty was the main leader as it closed higher by 950 points or nearly 4%. Mid caps saw profit booking even as IT & pharma stocks saw a strong comeback. The Nifty has reclaimed almost 720 points from the lows of Friday to yesterday's close in 3 sessions & now seems ripe for profit booking even as both local & foreign investors turn buyers.

Trading Ideas (Time period: 1-7 days)

ALLCARGO (Buy at Rs134-135 Target Rs144 Stop Loss Rs132): On the hourly chart, the price has moved up above the recent consolidation. The hourly RSI is in bullish crossover. The set up is conducive for further up move in the near term. Hold long positions with the mentioned stop loss.

Trading ideas (Time period: 1-14 days)

Sell DLF March future at Rs323-327, Stop Loss Rs331.45 & Target Rs318.5.

Derivative Strategies (Time period: Hold till expiry)

Sell Federal Bank March future at Rs88-88.5, Stop Loss Rs90 & Target Rs86.5.

20/01/2021

Market Mantra

US markets start the week with gains as technology stocks lead the Nasdaq higher by over 1.5%. Dow Jones closes higher by 115 points as markets look forward to new President elect swearing in & stimulus announcement. Janet Yellen sounds bullish on US$ with fixed rate regime which could see emerging markets take a setback.

Asian markets opened in the red as markets turned cautious ahead of the swearing in of the new US President & with new Federal Reserve head Janet Yellen sounding concerned over weakness in US$ which could spell bad news for emerging markets & the global equity rally. Chinese stocks see profit booking after hitting new 5 year highs.

The Nifty saw the best rally of the month as short covering/value buying saw the index jump 250 points. Bank Nifty also joined the party to climb 600 points or 1.93% as large cap banks saw huge buying interest. The breadth was positive even as foreign investors buying was the lowest for the month. Sensex regained 49500 & now again rekindles hopes for 50000 to be hit this week.

15/01/2021

Market Mantra

US markets end the session in the red after seeing new fresh all time highs as profit booking in last hour wipes out all gains. US$ stages a comeback trading over 90 points while bond yields remain unchanged near 1.11%. Pharma stocks make a strong comback even as banks see selling.

Asian markets opened flat to mildly negative as US markets ended in the red after a huge upswing in early trade. President Biden will unveil outlines of his stimulus package today which will see more volatility in global markets. Chinese stocks also saw a huge bout of profit booking after hitting 5 year highs yesterday.

The Nifty saw another positive close as large cap stocks led by TCS & Reliance powered the Nifty while the breadth was deeply negative. Foreign buying continued to power the Nifty while local fund selling also abated, which saw all dips being bought in the market. For today, expect some profit booking to continue in metals, banks & industrials while pharma & IT continue to see fund based buying.

08/01/2021

Market Summary:

The Nifty50 closed 9 points, or 0.06 per cent, lower at 14,137 levels. Out of the total 50 constituents, 27 advances on the Nifty while 23 ended the day in the red. The Nifty50 index hit a new peak of 14,256.25.The broader markets continued to outrun their large-cap peers. The S&P BSE MidCap, which topped the 19,000-mark for the first time and hit a record peak of 19,035, ended the day at 18,947 levels, up 1 per cent. The S&P BSE SmallCap index added 0.85 per cent to settle at 18,773.

Nifty View:

The Nifty Jan Fut closed 2 points or 0.02% lower at 14191. The Nifty Jan Fut closed at a premium of 53 points as against a premium of 43 points in the previous session. Nifty IV fell to 19% from 20% indicating volatility expectations. The Nifty OI PCR increased to 1.43 from 1.25 in the previous session, indicating there was more buildup of OI in the put segment. Implied volatility (IV) of Calls was down and closed at 16% vs 17% and Put IV options were down and closed at 21% vs 22%.

On the options front, maximum Put OI for 28th Jan series is at 13000 strike price with 26 lakh shares followed by 13500 & 14000 strike price. Meanwhile, maximum Call OI for 28th Jan series is at a 14000 strike price with 19 lakh shares followed by 14500 & 13900 strike price .

The higher premium of Nifty futures vis a vis spot has led to this consolidation in the index. Historically it is seen that Nifty finds it difficult to move up sharply when it's Future premium increases. So more consolidation is expected till this premium doesn't start getting lower.The Call writer's positions are still lower than Put writer's which means the declines in the index should be arrested and it should be more stock specific market taking hint from the earnings announcements.

In the coming session, the trading spot band is between 14270 and 14100,which means further upsides are likely once the immediate resistances of 14270 are taken out and weakness could emerge if the supports of 14100 are broken.

07/01/2021

News Today

Ramco Systems: CHI Aviation TRUSTS the company to embark on Group-wide Digital Transformation with Ramco Aviation M&E MRO Suite.

Lupin: US. FDA approves the Company's Sulfamethoxazole and Trimethoprim Oral Suspension USP, 200 mg/40 mg per 5 mL, to market a generic equivalent of Bactrim Oral Suspension, 200 mg/40 mg per 5 mL, of Sun Pharmaceutical Industries, Inc

Wendt promoters to sell up to 4.74% stake in the company via offer for sale between January 7-8. A floor price set at Rs 2,200 per share.

Dish TV India: Promoter entities Direct Media Distribution Ventures Pvt Ltd & Veena Investments Pvt Ltd pledge 1.84% stake

Capital Trust: Credit rating of the company and its subsidiary, Capital Trust Microfinance has been reaffirmed by CARE as BBB Negative along with Stable outlook

Maruti Suzuki’s production in December 2020 rises to 1.55 lakh vehicles, from 1.15 lakh vehicles in same month last year.

Kanpur Plastipack incorporated wholly-owned subsidiary (WOS) - Bright Choice Venture.

CARE revised the credit rating of Take Solution to BB+ (Issuer Rating) with Negative outlook, from BBB (Issuer Rating) with Negative outlook.

CARE Ratings has reaffirmed its AA/Stable rating to the long-term bank facilities of CEAT worth Rs800cr and A1+ rating to the short-term bank facilities worth Rs1,150cr.

NMDC Lump Ore prices raised 9.6% to Rs5,700 per ton from Rs5,200 per ton. Fines prices raised 4.3% to Rs4,810 per ton from Rs4,610 per ton.

Good demand across all product categories aids better sales numbers for Sobha in Q3FY21 as compared to the previous year. Total sales value up 22.2% to Rs887.6cr from Rs726.1cr. Sales volume of 11,33,574 square feet of super build-up area was the best ever quarterly sales volume.

Bandhan Bank's loans and advances rose 5% qoq to Rs80,255cr during the October-December period.

Dixon Technologies (India) has entered into an agreement with boAt for manufacturing of Twin wireless speakers.

NCL Industries' Cement production rose 50% to 6,32,746 MT in Q3FY21 from 4,23,199 MT in Q3FY20. Cement dispatches rose 45% to 6,25,162 MT versus 4,30,861 MT year-on-year.

Future Consumer's loan default amount till December 31 stands at Rs90cr and total outstanding loan amount stands at Rs329.09cr.

28/12/2020

Market Summary:

The Nifty50 witnessed a sharp rebound after Monday’s sell off, as Nifty recovered more than 600 points during the week to close almost flat down marginally by 0.1% at 13749 levels. Broader markets performed in tandem with the benchmark as the Nifty midcap and small cap recouped most of its intraweek decline and closed the week down by 1% and 0.7%, respectively. Brent Crude prices were lower at US$ 51.3/barrel as compared to the previous week’s closing price of US$ 52.0/barrel. Gold prices ended lower at $ 1889/ounce as compared to previous week’s closing price of $ 1880/ounce. Bond yields ended higher at 5.97% as compared to previous week’s closing price of 5.95%.

Nifty View:

The Nifty Dec Fut closed 151 points or 1.11% higher at 13763. The Nifty Dec Fut closed at a premium of 14 points as against a premium of 11 points in the previous session. Nifty IV fell to 18% from 19% indicating volatility expectations. The Nifty OI PCR increased to 1.75 from 1.45 in the previous session, indicating there was more buildup of OI in the put segment. Implied volatility (IV) of Calls was down and closed at 15% vs 16% and Put IV options were down and closed at 21% vs 22%.

On the options front, maximum Put OI for 31st Dec series is at 13000 strike price with 47 lakh shares followed by 13500 & 13200 strike price. Meanwhile, maximum Call OI for 31st Dec series is at a 14000 strike price with 35 lakh shares followed by 13500 & 13800 strike price .

From the options space, immediate option positions are visible at the 13500 Put strike, which is the highest Put base for the monthly settlement.On the higher side, the highest Callbase for the week is at the 14000 strike followed by 13800 strike

In the coming session, the trading spot band is between 13800 and 13620,which means further upsides are likely once the immediate resistances of 13800 are taken out and weakness could emerge if the supports of 13620 are broken.

24/12/2020

Market Mantra

US markets end off the highs as Dow Jones closes up 114 after being up nearly 280 intraday, while Nasdaq closes lower by 30 points with profit booking seen in technology stocks. President Trump passes defence package & also sees renewed optimism on a stimulus package for individuals.

Asian markets opened in the green led by the Japanese 'Nikkei' as markets look to end the week on a positive note despite the danger of new strains of Covid now rapidly progressing in new places. Chinese stocks will be in action as the Government acts against "Alibaba' on alleged unfair trade practices.

The Nifty had another superb day with the index rising over 134 points to close above 13600. Bank Nifty also closed higher by 250 points as short-covering/value buying saw mid-caps lead the gainers. IT, auto select banks & metals lead the rally with select PSU stocks seeing profit booking.

Trading Ideas(Time period: 1-7 days)

TATAMOTOR (Buy at Rs168-169 Target Rs175 Stop Loss Rs167):

On the daily chart, the price has moved higher after a Rickshaw man pattern. The daily RSI is in positive crossover. The set up is conducive for further up move in the near term. Hold long positions with the mentioned stop loss.

Trading ideas (Time period: 1-14 days)

BUY Ambuja Cement December future @ 236.5-238.5, stop loss 232.75 & target 242.5.

Derivative Strategies (Time period: Hold till expiry)

BUY ACC December future @ 1575-1590, stop loss 1551 & target 1615.

23/12/2020

Market Mantra

US markets end mixed with Dow Jones closing lower by 200 points while Nasdaq closing higher by 65 points. IT stocks led the gainers while energy & financials see selling pressure. Bond yields close flat near 0.90% even as oil prices remain subdued. Markets price in stimulus package passed by Congress with much more needed to revive economy.

Asian markets opened flat as yesterday most indices were in the red & today morning some buying would be visible. The undertone now seems more sanguine as investors prepare for more bad news on the 2nd wave Covid with Europe in another lockdown & the stock markets are not pricing in any weakness. Chinese stocks could be good contrarian plays if things were to worsen in other markets.

The Nifty had its volatility hit 4 month highs as it saw huge swings intra day before closing higher by over 135 points. Nifty saw intra day swings of over 300 points as fear dominated the early part of the day with Monday's huge fall seeing mark to market losses for derivative traders. Bank Nifty also saw over 735 points swings before closing higher by 170 points. IT stocks led the gainers with TCS & Infy hitting new highs while metals & industrials led the lowers.

Trading Ideas(Time period: 1-7 days)

UPL Dec Fut (Sell at Rs444-446 Target Rs430 Stop Loss Rs452):

On the hourly chart, the stock future has slipped below previous swing low. Daily RSI is making lower swing highs. The set up is conducive for further correction in the near term. Hold short positions with the mentioned stop loss.

Trading ideas (Time period: 1-14 days)

Sell Bharat Forge December future at Rs518-523, Stop Loss Rs531.2 & Target Rs510.

Derivative Strategies (Time period: Hold till expiry)

BUY Godrej Consumer December future at Rs710-715, Stop Loss Rs698 & Target Rs726

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