Markets Update: February 13, 2019 – Today’s action in the Markets

Markets Update: February 13, 2019 – Today’s action in the Markets

FPJ Web DeskUpdated: Wednesday, May 29, 2019, 02:28 AM IST
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As an investor, it’s understandable to feel nervous about investing when markets are making lower lows, as there is always a risk of panic selling.

Honestly speaking, stock volatility amidst deteriorating technical conditions are killing the ‘buy the dip’ mentality. The negative takeaway from today’s trade is that investors again suffered a sudden reversal of fortunes and most importantly for 4th day in a row.

Please note, the technicals have turned aggressively in favor of bears with immediate downside targets at 10671-10681 zone. Makes sense to keep books extremely light and that’s the gyan mantra until you see a sizeable convincing rebound.

Well, if you are from the perma-bulls camp, that is something you should hear loud and clear.

Now before we sign off for the day, let’s look at major instruments.

DOW Futures (+38, 25444)
NASDAQ Futures (+18, 7036)
DAX (+12, 11138)
FTSE (+31, 7164)

OIL (+0.68, $53.78)
GOLD (+2, $1316)
DOLLAR INDEX (+0.02, 96.76)
COPPER (+6, 6127)

How Asia fared today:

HANG SENG (+327, 28498)
NIKKEI (+280, 21145)
SHANGHAI (+49, 2721)

Nifty (-54, 10777)
Sensex (-175, 35979)
Bank Nifty (-125, 26885)
SGX NIFTY (-0, 10813)
USD/INR (-0.02, 70.68)

Attention squarely on U.S.-China trade talks. Dollar index hovers after building smart gains, Gold wavers. Bias on Crude-Oil shifts to positive after Saudi & OPEC cuts.

Gold (+2, 1316): Gold wavered in yesterday’s trade. Positive bias as long as 1291 support is held. Hurdles now seen at 1331. Interweek Strategy: Buy between 1297-1301 zone, targeting 1331 and then at 1351-1368 zone with stop below 1289.

MCX Gold (-0.18%, 32855). Buy only on corrective declines.

Silver (+0.03%, 15.72): Hurdles now seen at 16.09. Confirmation of major strength only above 16.75. Interweek Strategy: Buy at CMP, targeting 16.09 zone and then at 16.71-16.75 zone with stop below 14.91.
MCX Silver (+0.07%, 39563): Positive bias to continue.

Crude Oil (+0.52%, 53.62). Crude oil prices rebounded in yesterday’s trade. Key support now at 51 zone. Interweek strategy: Establish buy positions at CMP, targeting, 55 and then at 57.50 zone with strict stop at 51.

MCX Crude Oil (+0.97%, 3786). MCX Oil gains after Saudi & OPEC cuts. Confirmation of strength only above 3911. Interweek strategy: Buy at CMP, targeting 3911 mark and then aggressive targets at 4000-4076 zone with stop at 3611.

Copper (+0.32%, 6142): U.S-China trade truce could be a key positive catalyst.
MCX Copper (-0.11%, 434): Interweek strategy: Establish sell positions on excessive strength between 445-447.50 zone, targeting 433 mark and then aggressive targets at 421-427 zone with stop at 461.

We suspect, any intraday strength at Dalal Street to evaporate near Nifty’s key hurdles at 10919-10935 zone. Confirmation of strength if Nifty closes above 11001 mark.

The make-or-break intraday support on Nifty continues to be at 10787 mark. Please note, only below 10787 mark, the technicals turns in favor of bears.

Nifty’s KEY SUPPORTS: 10821/10787.
Nifty’s KEY HURDLE: 10935/11001.

Nifty’s INTRADAY RANGE: 10821-10921.
Nifty’s OUTLOOK FOR THE DAY: Buy only on any corrective declines. Strict stop below Nifty 10787 mark.

Bharat Forge, Bosch, Adani Gas, Godrej Industries, Lemon Tree Hotels, Prabhat Dairy, Reliance Capital and Ruchi Soya.

The Indian rupee strengthens further in the early action this Wednesday. It has opened higher by 22 paise at 70.48 per dollar versus previous close 70.70.

(Nifty: +44, 10874): In early action, the benchmark Nifty is seen joining the conga-line of rising worldwide stock markets after US lawmakers showed signs of positive developments on preventing a government shutdown and optimism grew over a potential trade deal between US and China.

Nifty’s hurdles still seen at 10935 mark and then at 11001 mark. Nifty’s make-or-support seen at 10787.

Amongst stocks on positive side are: SUN PHARMA (+2.85%, 449.05), IBULLSHSGFIN (+2.70%, 615.15), ITC (+2.62%, 282.50)

On the negative side are: HINDPETRO (-1.60%, 230) INFRATEL (-1.50%, 308.15) BPCL (-1.90%, 33).

Hang Seng in green driven by trade-deal hopes. Please note, Asian indices have touched four-month peak on U.S.-China trade deal hopes.

DOW FUTURES (+88, 25519)
NASDAQ FUTURES (+29, 7047)
SGX NIFTY (+30, 10891)
NIKKEI (+321, 21186)
HANG SENG (+99, 28270)
SHANGHAI (+14, 2686).

STOCKS TO WATCH:

Sluggish IIP data and rising crude-oil prices are likely to dash hopes of any sizeable recovery in stocks. Also, blame it to the negative market breadth which continues to be weak and most importantly relatively narrow at Dalal Street in terms of leadership.

That said, AVAS & PI Industries should be a stock on your radar on buy side as its technicals’ are aggressively bullish. And if you are from the bears camp and liking Salmon Sashimi then ACC & NIIT TECH are preferred bets on sell side!!

• Bullish stocks: AAVAS, SRF, UPL, Dr. LAL PATH LABS, TEAMLEASE, PI INDUSTRIES, DABUR.

• Bearish stocks: NIIT TECH, BRITANNIA, PFC, ACC, AMBUJA CEMENTS, UBI, OBC, BOI, CUMMINS, PNB, KSCL, TATA COMMUNICATION, MCX, NALCO.

SHOW ME THE MONEY: SELL PNB (CMP 71.35): The interweek/intermonth risk is on the downside as long as 76.50 resistance is held with aggressive downside targets at 57.50-63 zone. Interweek Strategy: Sell between 72-73 zone, targeting 63 and then at 57.50-59 zone with stop above 76.70.

Investment Call: AAVAS: Establishing long positions at CMP, and on any weakness between 849-861 zone should be the preferred trading strategy, targeting 915 and then at 931 and finally at its next psychological 951 mark

Q3 RESULTS TO TRICKLE IN TODAY:

• 13-Feb: Bharat Forge, Bosch, Adani Gas, Godrej Industries, Lemon Tree Hotels, Prabhat Dairy, Reliance Capital and Ruchi Soya.

Bulls Vs. Bears: Time to Pick a Side!!

An uninspiring session quite likely!

Preferred trade on Nifty (10831): Sell between 10881-10901 zone, targeting 10787-10801 zone with strict stop at 10941.

Preferred trade on Bank Nifty (27011): Key near term supports at 26381. Confirmation of strength only above 27751. Sell between 27200-27351 zone, targeting 26881 and then at 26381-26401 mark with strict stop at 27751.

• Nifty 28th February Futures ended Tuesday’s session at a premium of +28 against +35.

• The Put- Call Open Interest Ratio was at 1.21 for Nifty whereas it was 1.49 for Bank Nifty.

• The Put-Call Volume Ratio was at 0.89 for the Nifty and 1.23 for Bank Nifty.

• For Nifty, Maximum Call Open Interest (OI) stands at 11000 Strike Price, followed by 11200 Strike Price for 28th February Series. Short buildup was seen at strike price 10800-11000.

• Maximum Put Open Interest (OI) was seen at strike price 10400 followed by 10700 strike price for 28th February series. Short covering was seen at strike prices 10900-11200.

• For Bank Nifty, Maximum Call Open Interest (OI) stands at 27500 Strike Price and Maximum Put Open Interest stands at 27000 Strike Price.

• As per Tuesday’s Provisional Data available on the NSE, FII’s sold shares worth Rs. 466.78 crores in the Indian Equity Market. DIIs too sold shares worth Rs. 122.64 crores in the Indian Equity market.

• Long Buildup: BATA, PEL, UBL, TITAN, EICHER.

• Short Buildup: ICICIBANK, HDFC, ESCORTS, M&M FIN, LUPIN.

• Short Covering: SUN PHARMA, NCC, COAL INDIA, INDIACEM, JET AIRWAYS.

• Long Unwinding: SBIN, TCS, UPL, CONCORR, DABUR.

• Stocks banned in F&O segment for today: ADANI ENT, DHFL, IDBI, JETAIRWAYS, RELCAP, RPOWER.

Early action at SGX Nifty are indicating that our stock markets will open with a touch in the green.

Overnight Wall Street moved higher and higher on reports that U.S lawmakers reached a tentative deal to prevent a government shutdown and as optimism grew over a potential trade deal between the U.S. and China.

7 AM GLOBAL UPDATE:

DOW (+373, 25426)
NASDAQ (+107, 7415)
SGX NIFTY (+25, 10887)
NIKKEI (+231, 21086)
HANG SENG (+41, 28212)
BOVESPA (+1755, 96168)

OIL (+0.53, $53.63)
GOLD (+1, $1315)

SUCCESSFUL INVESTING IS ANTICIPATING THE TRENDS OF:

Global: Positive.
FII: Negative.
DII: Negative.
F&O: Negative.
‪Sentiment: Negative.

NIFTY’s CRUCIAL LEVELS:

Nifty’s CURRENT MARKET PRICE: 10,831.

Nifty’s SUPPORT:
Intraday: 10807/10,787.
Medium Term: 10,721/10,583.
Long Term: 9,951.

Nifty’s RESISTANCE:
Intraday: 10935, 11001.
Medium Term: 11,125/11,501.
Long Term: 11,751.

Nifty’s RANGE:
Intraday: 10,787-10935.
Medium Term: 10,501-11,125.
Long Term: 10301-11,701.

Nifty’s OUTLOOK
Intraday: Neutral.
Medium Term: Neutral.
Long Term: Positive.

Our call of the day says Nifty may gather strength for a rebound in morning trade, but that said, on any excessive strength the bears are likely to take control. Downside risk on Nifty continues to be at 10787 mark. Bulls could again regroup at lower levels near Nifty 10787 mark.

Volatility likely to be hallmark of today’s trade. Technically speaking, ‘Cash will be king — until Nifty is unable to move above its crucial hurdles at 11001 mark’.

Our chart of the day suggests establishing short positions in stocks like ACC, NIIT TECH & BRITANNIA on any early strength with interweek perspective.

Q3 EARNINGS TO TRICKLE IN THIS WEEK:

• 13-Feb: Bharat Forge, Bosch, Adani Gas, Godrej Industries, Lemon Tree Hotels, Prabhat Dairy, Reliance Capital and Ruchi Soya.

• 14-Feb: Glenmark Pharma, GVK Power, HDIL, Infibeam, MTNL, Nestle India, ONGC, Tata Teleservices, United Breweries, and Voltas.

IMPORTANT THEMES FOR THE DAY:

1. Oil up nearly 3 percent on Saudi and OPEC cuts.

2. Volatility likely to be hallmark of today’s trade. The broader markets will also struggle amidst a lackluster IIP data:

o IIP grows at 2.4% in December against 7.3% in year-ago period.

o Retail inflation slips to a 19-month low of 2.05% on falling food prices.

3. Meanwhile, the U.S.-China trade talks, which include U.S. Trade Representative Robert Lighthizer, continue in Beijing as both sides attempt to strike a deal before the March 1 deadline, when additional U.S. tariffs on Chinese imports are set to be hiked.

Expectations now are that the March 1 deadline, when tariffs on around $200 billion of Chinese goods are supposed to be raised to 25 percent from 10 percent, could be extended.

Disclaimer: LotusFunds subscribers/clients may have positions in the stocks  recommended in this note. Please note that the actual subscribers may receive additional information in real time not available to the viewers of this note.

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