Markets Update: February 19, 2019 – Today’s action in the Markets

16:00 Hrs: Latest After the Closing Bell

Nifty (-37, 10604): Well, well, well…What was expected to be a rebound session turned out to be 8th straight session of losses.
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?

Geopolitical tensions, political season ahead, rising crude-oil prices, global growth concerns, failure of U.S-China trade issues..

The big question: Should we panic?

We repeat, 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.

4.00 PM GLOBAL UPDATE:

DOW Futures (-54, 25854)
NASDAQ Futures (-21, 7056)
DAX (-19, 11291)
FTSE (-30, 7183)

OIL (+0.36, $56.34)
GOLD (+10, $1332)
DOLLAR INDEX (+0.003, 96.74)
COPPER (+59, 6252)

How Asia fared today:

HANG SENG (-163, 28201)
NIKKEI (+36, 21288)
SHANGHAI (+1, 2756)

Nifty (-37, 10604)
Sensex (-146, 35353)
Bank Nifty (+31, 26685)
SGX NIFTY (-40, 10614)
USD/INR (+0.01, 71.415)

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15:00 Hrs: Where’s the clever money going at 3 PM?

Nifty (-10, 10630): Volatility rules the roost. Unbelievable!

The table again turns in favour of bears as Nifty wipes out all its intraday gains. You can blame it to buyers who are becoming Sellers again. Amidst this scenario, long positions not advisable.

Probable BTST/STBT trades:

Bullish looking BTST stocks: BANK NIFTY, REC, PFC, YES BANK.

Negative looking STBT stocks: RELIANCE, ACC, ADANI PORTS, INDIABULLS HOUSING.

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14:30 Hrs: Life at Dalal Street after Europe’s Opening Bell

(Nifty 10685, UP 44 points): Nifty set to snap 7-day winning streak. The benchmark Nifty has managed a relief rally in today’s session, and aiming to close above the psychological 10700 mark.

It will be interesting to see if the indices hold on to its gains towards the end of today’s session. Aggressive buyers can look to establish long positions only if Nifty crosses 1001 mark. At the time of writing, European indices were slightly cautious.

DAX (-15, 11282)
FTSE (-4, 7209)

DOW Futures (-17, 25897)
NASDAQ Futures (+9, 7073)

HANG SENG (-118, 28228)
NIKKEI (+21, 21303),
SHANGHAI (+1, 2756)

Nifty (+44, 10685)
Sensex (+136, 35634)
Bank Nifty (+287, 26942)

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12:30 Hrs: Dalal Street’s Top Stories at Midday

(Nifty 10678, up 37 points): The benchmark Nifty is seen trading with a touch of green in today’s trade thanks in part to oversold conditions and then in part to hopes of positive outcome from the US-China trade talks.
• Having said that and considering recent under-performance, it makes sense to hold horses on buy side as confirmation of reversal of downtrend only if Nifty moves above 10809 mark. So until then, a prudent strategy would be to keep book light. The most watched Nifty’s support seen at 10583.
• In Asia today, Nikkei was slightly in green whereas Hang Seng and Shanghai witnessed some profit booking.
• Among sectoral indices, barring IT and Pharma, all the other indices are in green.
• The market breadth, indicating the overall health of the market is positive.
• NSE Advances 35. NSE declines 15.
• The NSE Mid-Cap index is up 0.96% at 4,448. The NSE Small-Cap index is up 0.49% at 5,699.
• In F&O space IDBI, INDIAN BANK, DLF & ADANIENT are in green, up 6%, 6%, 5% and 5% respectively; while on flip side DISHTV, KSCL & RELCAP are down 9%, 6% & 5% respectively.
• Q3 RESULTS TO TRICKLE in today: Linde India

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10:30 Hrs: Pursue Opportunities in commodities

Attention squarely on U.S.-China trade talks. Crude-oil trades firm near 3-month highs on U.S.-China trade talk progress, signs of falling crude output from Saudi & OPEC cuts.

Gold (+0.34%, 1327): Interweek Strategy: Buy between 1305-1315 zone, targeting 1331 and then at 1351-1368 zone with stop below 1299.

MCX Gold (-0.18%, 33605): Interweek strategy: Buy between 33251-332351 zone, targeting 33751 and then at 33901 and then finally at 34751-35001 zone with stop at 32911.

Silver (-0.36%, 15.75): 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%, 40207): Interweek strategy: Buy at CMP, targeting 40261 mark and then aggressive targets at 41500-41698 zone with stop at 39411.

Crude Oil (+0.27%, 56.15). Interweek strategy: Establish buy positions between 53-55 zone, targeting, 57.50 and then finally at 59 zone with strict stop at 52.05.

MCX Crude Oil (+0.97%, 3993). Interweek strategy: Buy between 3901-3925 zone, targeting 4076 mark and then aggressive targets at 4250-4315 zone with stop at 3771.

Copper (-0.12%, 6255): Progress in U.S-China trade truce key positive catalyst.
MCX Copper (-0.11%, 448): Interweek strategy: Establish buy positions between 437-442.50 zone, targeting 451 mark and then aggressive targets at 463-475 zone with stop at 431.

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10:00 Hrs: Nifty’s Crucial Levels at 10 AM

Nifty’s (+45, 10685): There’s a good chance that the market will snap its 7-day losing streak.

We say so because there is also abundance of good news at the moment in the form of the U.S and China trade truce as there are reportedly signs of progress.

The biggest support for Nifty now seen at 10583 mark. Intraday supports seen at 10619-10625 zone.

What Technical Tells Us On Nifty:

Nifty’s KEY SUPPORTS: 10619/10583.
Nifty’s KEY HURDLE: 10709/10807/10929.

Nifty’s INTRADAY RANGE: 10625-10725.
Nifty’s OUTLOOK FOR THE DAY: Buy on dips.

When trading resumes at Wall Street this Tuesday, all investors eye will be on Amazon earnings.

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09:30 Hrs: Make Informed Decisions at 9:30 AM

(Nifty: +22, 10662): As widely expected, the benchmark Nifty opens above the dotted lines, but the broader markets still languishing and unable to shake off negativity surrounding Dalal Street.

Meanwhile, China has accused the US of fueling cyber security fears. All worldwide eyes on developments of the US-China trade front. The White House reportedly said on Monday that trade talks between the two economic powerhouses will continue in Washington on Tuesday, with higher level negotiations starting later in the week.

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.

Nifty’s hurdles seen at 10701 mark and then at 10809 mark. Nifty’s support now seen at 10583 mark.

Amongst stocks on positive side are: YES BANK (+1.29%, 216.30) TITAN (+1.07%, 1018) TATA STEEL (+1%, 469.75)

On the negative side are: IBULLSHSGFIN (-0.92%, 617.75) INFY (-0.86%, 734.65) WIPRO (-0.84%, 372.45).

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09:00 Hrs: What Caught our Eye at 9 AM?

This Tuesday morning, positive global cues are again giving buy signals for our stock markets. Amidst this backdrop, the needle could move on the positive side.

DOW FUTURES (+15, 25903)
NASDAQ FUTURES (+18, 7082)
SGX NIFTY (+18, 10671)
NIKKEI (+16, 21297)
HANG SENG (+91, 28438)
SHANGHAI (+25, 2779).

STOCKS TO WATCH:

Negative FIIs flows amidst rising crude-oil prices plus tensions over Kashmir could weigh on sentiment and 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: IPCA LABS, AIA ENGINEERING, IGL, REC, PFC, BEML, BATA, AAVAS, SRF, UPL, Dr. LAL PATH LABS, TEAMLEASE, PI INDUSTRIES, DABUR..

Bearish stocks: HPCL, BHARAT FORGE, IOC, ACC, AMBUJA CEMENTS, UBI, OBC, BOI, CUMMINS, PNB, KSCL, MCX, NMDC, NALCO.

SHOW ME THE MONEY: Buy IPCA lABS (CMP 808.25): Establishing long positions between 801-803 zone should be the preferred trading strategy, targeting 831.50 and then at 855 zone. Stop at 759. Holding Period: 15 days.

SELL BHARAT FORGE (CMP 458): Stock price is seen moving in a downward sloping channel. Key hurdles now at 484. Interweek strategy: Establish short positions between 464-467 zone, targeting 437 and then aggressive targets at 415-419 zone with stop at 488.

Q3 RESULTS TO TRICKLE IN TODAY: India’s corporate earnings have started to dry up.

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

Nifty may aim to snap 8 day loosing streak.

Preferred trade on Nifty (10641): Buy between 10591-10611 zone, targeting 10701 and then aggressive targets at 10775-10801 zone with strict stop at 10561.

Preferred trade on Bank Nifty (26654): The biggest near term supports at 26381. Confirmation of strength only above 27751. Sell between 26801-26901 zone, targeting 26381 and then at 25381-25501 mark with strict stop at 27251.

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08:00 Hrs: Calculus Derivatives Corner

Market Summary:

• Nifty 28th February Futures ended Monday’s session at a premium of +14 against +26.

• The Put- Call Open Interest Ratio was at 0.95 for Nifty whereas it was 1.31 for Bank Nifty.

The Put-Call Volume Ratio was at 0.96 for the Nifty and 0.84 for Bank Nifty.

• For Nifty, Maximum Call Open Interest (OI) stands at 11000 Strike Price, followed by 10800 Strike Price for 28th February Series. Short buildup was seen at strike prices 10600-10900.

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 10700-11000.

• For Bank Nifty, Maximum Call Open Interest (OI) stands at 28000 Strike Price and Maximum Put Open Interest stands at 28000 Strike Price.

• As per Monday’s Provisional Data available on the NSE, FII’s sold shares worth Rs. 1239.79 crores in the Indian Equity Market. DIIs on the other hand, bought shares worth Rs. 2336.74 crores in the Indian Equity market.

• Long Buildup: IGL, TECHM,

• Short Buildup: L&T FH, RELIANCE, YES BANK, M&M, IBHSGFIN.

• Short Covering: TATACOMM, UPL, DR REDDY, DHFL, NIITTECH.

• Long Unwinding: REC, ADANI PORTS, HUL, TCS.

Stocks banned in F&O segment for today: ADANI ENT, CG POWER, IDBI, JETAIRWAYS, JAIN IRRIGATION, PC JEWELLER, RELIANCE INFRA, RPOWER.

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07:00 Hrs: Know What Matters at Dalal Street at 7 AM!!

Markets Update: February 19, 2019 – Today’s action in the Markets

Wall Street was closed on Monday in observance of Presidents’ Day. Asia trades with positive bias on backdrop of abundance of promising sentiments on the U.S-China trade truce front.

GLOBAL UPDATE:

DOW (CLOSED, 25883)
NASDAQ (CLOSED, 7472)
SGX NIFTY (+18, 10671)
NIKKEI (-6, 21277)
HANG SENG (+57, 28403)
BOVESPA (-1016, 96510)

OIL (+0.12, $55.71)
GOLD (+6, $1328)

SUCCESSFUL INVESTING IS ANTICIPATING THE TRENDS OF:

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

NIFTY’s CRUCIAL LEVELS:

Nifty’s CURRENT MARKET PRICE: 10,641.

Nifty’s SUPPORT:
Intraday: 10,601/10583.
Medium Term: 10,583/10,333.
Long Term: 9,951.

Nifty’s RESISTANCE:
Intraday: 10701, 10809.
Medium Term: 10,921/11,125.
Long Term: 11,751.

Nifty’s RANGE:
Intraday: 10,601-10701.
Medium Term: 10,501-11,000.
Long Term: 9950-11,725.

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

Our call of the day:

Suggested there is anxiety and lots of nervousness amongst investors. 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?

The big question: Should we panic?

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.

Our markets continue to look depressed as ‘Geopolitical concerns’ are seen as key catalyst keeping investors’ on the back foot.

Nifty’s downside for the day likely to be limited at 10583-10589 zone. Bulls will probably aim to regroup and snap 7-day falling streak.

Our chart of the day suggests establishing short positions in stocks like HINDUSTAN PETROLEUM, BHARAT FORGE and BAJAJ FINSERV with interweek perspective.

Q3 EARNINGS TO TRICKLE IN TODAY:

• 19-Feb: Linde India.

IMPORTANT THEMES FOR THE DAY:

• 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 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.

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