The scene at Dalal Street resembles a horror movie where the main character keeps walking by the scary door. The suspense is building — what’s next?
We suspect, the benchmark Nifty is not done falling. Not a pretty picture as the trading screen still suggests that we have not yet settled down. Honestly speaking, the gyan mantra to stay afloat in a volatile market like this is to keep books light on buy side.
Technically, fortunes on the buy side only if Nifty holds and rebounds from its key at Jan 2019 lows at 10,583.
Now before we sign off for the day, let’s look at major instruments.
GLOBAL UPDATE:
DOW Futures (-13, 25877)
NASDAQ Futures (-3, 7054)
DAX (-51, 11271)
FTSE (-24, 7217)
OIL (-0.12, $66.13)
GOLD (+3.12, $1324)
DOLLAR INDEX (-0.13, 96.61)
COPPER (+46, 6183)
How Asia fared today:
HANG SENG (+446, 28347)
NIKKEI (+381, 21281)
SHANGHAI (+71, 2754)
Nifty (-91, 10655)
Sensex (-310, 35498)
Bank Nifty (-145, 26722)
SGX NIFTY (-97, 10657)
USD/INR (+0.15, 71.47)
Attention squarely on U.S.-China trade talks.
USD/INR firms up and that’s likely to be the big positive catalyst for yellow metal, Silver and crude-oil prices. Bias on Crude-Oil continues to be positive after Saudi & OPEC cuts.
Gold (+0.34%, 1315): Interweek Strategy: Buy between 1305-1315 zone, targeting 1331 and then at 1351-1368 zone with stop below 1299.
MCX Gold (-0.18%, 33554). Interweek strategy: Buy between 33100-33200 zone, targeting 33601 and then at 33901 and then finally at 34751-35001 zone with stop at 32711.
Silver (-0.36%, 15.78): 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%, 40235): Interweek strategy: Buy at CMP, targeting 40261 mark and then aggressive targets at 41500-41698 zone with stop at 39411.
Crude Oil (+0.27%, 56.24). Interweek strategy: Establish buy positions at CMP, targeting, 57.50 and then finally at 59 zone with strict stop at 52.05.
MCX Crude Oil (+0.97%, 3993). Interweek strategy: Buy at CMP, targeting 4076 mark and then aggressive targets at 4250-4315 zone with stop at 3771.
Copper (-0.04%, 6220): U.S-China trade truce key catalyst.
MCX Copper (-0.11%, 445): Interweek strategy: Establish buy positions at CMP, targeting 451 mark and then aggressive targets at 463-475 zone with stop at 417.
The sentimental landscape is seen deteriorating further at Dalal Street. From 11125 peak to 10655 valley in a span of just 7 trading sessions on benchmark Nifty. The bears are now seen simply seen claiming final victory this 7th day.
The biggest support for Nifty now seen at 10583 mark.
What Technical Tells Us On Nifty:
Nifty’s KEY SUPPORTS: 10583.
Nifty’s KEY HURDLE: 10759/10829/10951.
Nifty’s INTRADAY RANGE: 10621-10725.
Nifty’s OUTLOOK FOR THE DAY: Up & Down session likely.
The Indian rupee weakens further in the early action this Monday. It has opened lower by 30 paise at 71.44 per dollar.
(Nifty: -39, 10685): In early action, the benchmark Nifty is slapped lower as investors are unable to shake off negativity surrounding Dalal Street. Nifty’s hurdles seen at 10821 mark and then at 10861 mark. Nifty’s support now seen at 10583 mark.
Amongst stocks on positive side are: DR REDDYS LAB (+3%, 2643) VEDL (+2%, 151) NTPC (+2%, 150)
On the negative side are: YES BANK (-4%, 210) COAL INDIA (-2%, 215.65) ULTRATECH (-1.45%, 3391).
This Monday morning, extremely positive global cues are giving buy signals for our stock markets. Amidst this backdrop, the needle is likely to move more on the optimistic side.
DOW FUTURES (+15, 25903)
NASDAQ FUTURES (+11, 7075)
SGX NIFTY (+23, 10777)
NIKKEI (+373, 21273)
HANG SENG (+507, 28408)
SHANGHAI (+43, 2725).
Negative FIIs flows amidst rising crude-oil prices could dash hopes of any sizeable recovery in stocks. Keep an eye on the negative market breadth which continues to be weak and most importantly relatively narrow at Dalal Street in terms of leadership.
• Bullish stocks: AIA ENGINEERING, REC, PFC, SUN TV, BEML, BATA, DFM FOODS, AAVAS, SRF, UPL, Dr. LAL PATH LABS, TEAMLEASE, PI INDUSTRIES, DABUR..
• Bearish stocks: HPCL, IOC, MARICO, ACC, AMBUJA CEMENTS, UBI, OBC, BOI, CUMMINS, PNB, KSCL, MCX, NMDC, NALCO.
Buy ABFRL at 218.15 Targets : 224.3 / 230.45. Stop Loss – 212.
Buy AIA ENGINEERING (CMP 1696): Establishing long positions at CMP should be the preferred trading strategy, targeting 1783 and then at 1851-1881 zone. Stop at 1621. Holding Period: 21 days.
• 18-Feb: Ambuja Cements, Mcnally Bharat, Engineers India.
A positive session quite likely.
Preferred trade on Nifty (10724): Buy between 10675-10691 zone, targeting 10821-10861 zone with strict stop at 10583.
Preferred trade on Bank Nifty (26794): The biggest near term supports at 26381. Confirmation of strength only above 27751. Sell between 26901-27001 zone, targeting 26381 and then at 25381-25501 mark with strict stop at 27501.
• Nifty 28th February Futures ended Friday’s session at a premium of +26 against +48.
• The Put- Call Open Interest Ratio was at 1.09 for Nifty whereas it was 1.34 for Bank Nifty.
• The Put-Call Volume Ratio was at 1.06 for the Nifty and 1.21 for Bank Nifty.
• For Nifty, Maximum Call Open Interest (OI) stands at 11000 Strike Price, followed by 10900 Strike Price for 28th February Series. Short buildup was seen at strike prices 10600-10800.
• Maximum Put Open Interest (OI) was seen at strike price 10700 followed by 10400 strike price for 28th February series. Long buildup was seen at strike prices 10400-10500.
• 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 Friday’s Provisional Data available on the NSE, FII’s sold shares worth Rs. 966.43 crores in the Indian Equity Market. DIIs on the other hand, bought shares worth Rs. 853.25 crores in the Indian Equity market.
• Long Buildup: JUBLFOOD, PFC.
• Short Buildup: HDFC, JSW STEEL, ASHOKLEY, VEDL, NCC.
• Short Covering: RELIANCE, VOLTAS, IOC, L&T.
• Long Unwinding: AXIS BANK, TITAN, MANAPPURAM, KTK BANK, ESCORTS.
• Stocks banned in F&O segment for today: ADANI ENT, CG POWER, JETAIRWAYS, JAIN IRRIGATION, PC JEWELLER, RPOWER.
GLOBAL UPDATE:
DOW (+443, 25883)
NASDAQ (+46, 7472)
SGX NIFTY (+14, 10769)
NIKKEI (+310, 21210)
HANG SENG (+442, 28343)
BOVESPA (-409, 97526)
OIL (+0.39, $55.80)
GOLD (+5, $1327)
Global: Positive.
FII: Negative.
DII: Positive.
F&O: Negative.
Sentiment: Cautiously positive.
Nifty’s CURRENT MARKET PRICE: 10,724.
Nifty’s SUPPORT:
Intraday: 10,675/10620.
Medium Term: 10,583/10,333.
Long Term: 9,951.
Nifty’s RESISTANCE:
Intraday: 10821, 10921.
Medium Term: 11,001/11,125.
Long Term: 11,751.
Nifty’s RANGE:
Intraday: 10,701-10861.
Medium Term: 10,501-11,125.
Long Term: 10301-11,701.
Nifty’s OUTLOOK
Intraday: Positive.
Medium Term: Neutral.
Long Term: Positive.
Dalal Street is likely to start the week on a cautiously positive note amidst a strong close at Wall Street in Friday’s trade. The direction of the markets squarely rests on the progress in U.S.-China trade negotiations.
Nifty’s downside for the day likely to be limited at 10675-10681 zone. Bulls will probably aim to regroup and snap 6-day falling streak.
Our chart of the day suggests establishing long positions in stocks like REC, PFC & BATA INDIA with interweek perspective.
• 18-Feb: Ambuja Cements, Mcnally Bharat, Engineers India.
• Oil continues to trade firm on Saudi and OPEC cuts, now at $56 a barrel.
• The direction of our stock markets squarely rests on the progress in U.S.-China trade negotiations.
Reports suggests that U.S-China talks to continue this week in Washington and that adds fresh hope that a resolution is near, even if the two countries appear far apart on key points. China is reportedly hoping that purchases of U.S. semiconductor and other goods will ease tensions and persuade Trump to extend a tariff truce which ends on March 1.
• Having said that, the needle could again move on the pessimism side if border tensions flare up. Prime Minister Narendra Modi on Friday put Pakistan on notice, saying those responsible for the Pulwama terror attack would pay a “very heavy price”.
• Now with India’s corporate earnings starting to dry up, traders’ full focus this week would be on the RBI Board meeting which is slated to take a call on interim dividend to government on February 18. Also all eyes will be on the GST Council meeting.
• The GST Council is scheduled to meet on February 20 to discuss a proposal to slash tax on cement to 18 per cent from 28% and also consider a recommendation of a Group of Ministers (GoM) on housing that advocates 5% GST on under-construction properties and 3 per cent GST on affordable housing.
• Wall Street surged higher on Friday, buoyed by growing optimism that the U.S. and China can strike a trade truce ahead of the March 1 deadline. A big chunk of gains for global markets have been credited to optimism over the trade negotiations. The Dow booked its eighth straight weekly gain, and that’s the longest such streak for the period ended Nov. 3, 2017.
In last week’s trade, the Dow Jones Industrial Average ended at 25,106, up 3.1% for the week. The S&P 500 index gained 2.5% for the week. The Nasdaq Composite Index added 2.4% for the week.
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