AFP PHOTO / PUNIT PARANJPE
AFP PHOTO / PUNIT PARANJPE

LATEST AFTER THE BELL: 7th February 2019

Nifty (+7, 11069): Nifty manages six day winning streak

Volatility ruled the roost after RBI Policy meet outcome where MPC cut repo rate by 25 bps to 6.25%; stance too was changed to neutral. The central bank forecast India’s economy will expand at a 7.4% pace in 2019-20, up from 7.2% in this fiscal year.

The RBI’s rate cut failed to cheer Dalal Street; the WOW feeling was missing!

All worldwide investors’ eye now turn to the U.S. and China as they begin another round of trade talks next week.

Well, if benchmark Nifty has to climb from current higher levels then a quick resolution needed in the 11-month old longstanding trade tensions between the U.S. and China.

Any amicable resolution could trigger a blazing rally at Dalal Street with aggressive targets on Nifty at 11,750 mark. But for tomorrow, the make-or-break hurdles on Nifty continues to be at 11,111 mark.

Amongst stocks, it will interesting to see how index heavyweight Reliance Industries, HDFC and HDFC Bank perform in near term considering overbought technical conditions.

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

4.00 PM GLOBAL UPDATE:

DOW Futures (-27, 25300)
NASDAQ Futures (-14, 6982)
DAX (-51, 11274)
FTSE (+11, 7184)

OIL (+0.14, $54.14)
GOLD (-4, $1311)
DOLLAR INDEX (+0.16, 96.54)
COPPER (+5, 6253)

How Asia fared today:

HANG SENG (CLOSED, 27990)
NIKKEI (-122, 20751)
SHANGHAI (CLOSED, 2618)

Nifty (+7, 11069)
Sensex (-4, 36972)
Bank Nifty (-15, 27387)
SGX NIFTY (-0, 11091)
USD/INR (-0.15, 71.40)

Where’s the clever money going at 3 PM?

Nifty (+42, 11103): Nifty has moved up impressively considering the fate of worldwide stock markets which at the time of writing are seen trading with negative bias.

Bias on Nifty continues to be positive with hurdles on Nifty at 11111 mark.

Probable BTST/STBT trades

Bullish looking BTST stocks: REC, PFC, INFRATEL, DABUR, NESTLE

Negative looking STBT stocks: LUPIN, RELIANCE INDUSTRIES, TATA COMMUNICATION, MCX.

2.00 pm: Life at Dalal Street after Europe’s Opening Bell

The benchmark Nifty continues to trade with strength after RBI Policy meet outcome where MPC cuts repo rate by 25 bps to 6.25%; stance changed to neutral. In a bi-monthly review of the economy released Thursday, the central bank forecast India’s economy will expand at a 7.4% pace in 2019-20, up from 7.2% in this fiscal year. India’s financial year runs from April to March.

Meanwhile, Nikkei and European stock markets  was seen slipping on trade worries!

Well, if benchmark Nifty has to climb from current higher levels then a quick resolution needed in the 11-month old longstanding trade tensions between the U.S. and China. This set up is likely to lead to more overall buying in near term.

Any amicable resolution could trigger a blazing rally at Dalal Street with aggressive targets on Nifty at 11,750 mark.

DAX (-58, 11267)

FTSE (-10, 7163)

DOW Futures (-47, 25280)

NASDAQ Futures (-21, 6975)

HANG SENG (CLOSED, 27990)

NIKKEI (-122, 20751)

SHANGHAI (CLOSED,  2618)

Nifty (+46, 11007)

Bank Nifty (+111, 27513)

10.30 am: Pursue Opportunities in commodities

Copper steadily in green. Profit booking in bullions

Gold (-8, 1307): Buy only on corrective declines.

MCX Gold (-0.62%, 33120). Interweek strategy: BUY between 33001-33251 zone, targeting 33901 and then at 34751-35001 zone with stop at 32751.

Silver (-0.064, 15.637): Buy on corrective declines

MCX Silver (-0.52%, 39938): Buy at CMP, targeting 41698 mark and then aggressive targets at 41751-42001 zone with stop at 39301.

Crude Oil (-0.15, 53.86).  Interweek strategy: Establish buy positions between 51-52 zone, targeting, 57.50 and then at 59-60 zone with strict stop at  49..

MCX Crude Oil (-0.44%, 3863). Interweek strategy: Aggressive traders can look to establish buy at CMP, targeting 4071 and then at  42751-4315 zone with stop at  3611.

Copper (+0.002, 2.826): U.S-China trade trade truce key positive catalyst.

MCX Copper (-0.35%, 447.60): Interweek strategy: Establish buy positions  between 437-441 zone, targeting  457mark and then aggressive targets at 471 with stop at 431.

10 am: NIFTY’s CRUCIAL LEVELS

Nifty’s (+24, 11087) Nifty continues to trade higher taking a widely subdued global cues in its stride.

Technically, the benchmark Nifty faces major hurdles at 11,111 mark. (61.8% of the move from Aug high to Oct 2018 lows).*

Confirmation of strength if Nifty closes above 11111 mark Above 11111, expect massive short covering and as newly optimistic investors step in.

All eyes now turn to the biggest event of the day: RBI Policy meet outcome at 11.45 am, followed by RBI Governor’s Speech at 12.00 pm.

What Technical Tells Us On Nifty:

Nifty’s KEY SUPPORTS: 10969/10901/10813.

Nifty’s KEY HURDLE: 11111.

Nifty’s INTRADAY RANGE: 10945-11145.

Nifty’s OUTLOOK FOR THE DAY: Buy on any corrective declines.

Q3 Results to trickle in today, 7th February 2019:  Tata Motors, Aurobindo Pharma, Britannia, Adani Enterprises, Coffee Day, Cadila Healthcare, Arvind, MRF, MRPL, SAIL,  and Grasim.

9.30 am:  MAKE INFORMED DECISIONS!  MISSION IS TO MAKE MONEY!!

(Nifty: +33, 11097):

Nifty trades higher in early action taking a widely subdued global cues in its stride.

Helping sentiments are FIIs action at domestic stock markets where they were again net buyers to the tune of Rs. 694.97 crores in yesterday’s trade. The DIIs camp too had mopped up shares worth Rs. 525.26 crores.

In February month, FIIs are net buyers to the tune of 2319.38 Cr.

Nifty hurdles now are at 11111 mark.

After a higher open the benchmarks are likely to seesaw around the break even line as investors turn their attention to the biggest event of the day: RBI Policy meet outcome!

Meanwhile, Chinese & Hang Seng stock markets which are closed on account of Lunar holidays.

Amongst stocks on positive side are: SUN PHARMA (+2.62%, 428) HCL TECH (+1.45%, 1071) CIPLA (+1.36%,  542)

On the negative side are INFRATEL (-1.70%, 291) JSW STEEL (-1.47%, 275) HINDALCO (-1.23%, 209).

Despite a strong domestic stock market, the Indian rupee opened lower by 10 paise at 71.65 per dollar

9 am: What caught our eye

DOW FUTURES (-32, 25295)

NASDAQ FUTURES (-13, 6983)

SGX NIFTY (-33, 11072)

NIKKEI (-137, 20737)

HANG SENG (CLOSED, 27990)

SHANGHAI (CLOSED, 2599).

All worldwide investors eye will  be on the U.S. and China as they begin another round of trade talks next week. President Donald Trump, in his State of the Union address in early Wednesday IST had said that a new trade deal with China must include:

  1. An end to unfair trade practices
  2. Reduce the U.S. trade deficit with China
  3. Protect American jobs.

STOCKS TO WATCH:

Despite positive and constructive backdrop on Nifty, most of the momentum stocks are simply seen struggling. The market breadth continues to be weak and most importantly relatively narrow at Dalal Street in terms of leadership.

To put it straight, ‘Cash is king — even in a bull market’

  • Bullish stocks: Dr. LAL PATH LABS, TEAMLEASE, PI INDUSTRIES, APOLLO HOSPITALS, DABUR, LARSEN, NESTLE, LTI, BRITANNIA, PAGE INDUSTRIES.
  • Bearish stocks: KSCL, TATA COMMUNICATION, MCX, MUTHOOTH FINANCE, MRF, NALCO.
  • SHOW ME THE MONEY: BUY BRITANNIA (CMP 3181): Q3 Results today. Technically, BRITANNIA is signaling a major rebound from a higher consolidation zone on the daily charts. Key support seen at  3045 zone. Key hurdles seen at  3305. Interweek Strategy: Buy between 3121-1345 zone, targeting  3305  and then at  3501-3507 zone. Stop below  3041.

Q3 RESULTS TO TRICKLE IN THIS WEEK:

  • 7-Feb: Tata Motors, Aurobindo Pharma, Britannia, Adani Enterprises, Coffee Day, Cadila Healthcare, Arvind, MRF, MRPL, SAIL, and Grasim.
  • 8-Feb: Mahindra & Mahindra, NHPC, BPCL and Engineers India.

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

State of flux. Nifty likely to seesaw around the break even line in morning session and then turn volatile after RBI meet outcome.

Perma-bulls can look to buy only on any sharp intraday corrective declines.

Preferred trade on Nifty (11062): Buy between 10945-10975 zone, targeting 11111 and then at 11250-11301 zone with strict stop at 10771.

Preferred trade on Bank Nifty (27402): Key near term supports at 26381. Confirmation of strength only above 27751. Buy between 26951-27101 zone, targeting 27751 and then at 28101-28251 mark with strict stop at 26301.

8 am Update:

Yippee!!

In yesterday’s trade, the FIIs were again net buyers to the tune of Rs. 694.97 crores and the DIIs camp too mopped up shares worth Rs. 525.26 crores.

In February month, FIIs are net buyers to the tune of 2319.38 Cr.

Market Summary:

  • Nifty 28th February Futures ended Wednesday’s session at a premium of +26 against +21.
  • The Put- Call Open Interest Ratio was at 1.63 for Nifty whereas it was 1.38 for Bank Nifty.
  • The Put-Call Volume Ratio was at 1.12 for the Nifty and 0.98 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 covering was seen at strike price 11200.
  • Maximum Put Open Interest (OI) was seen at strike price 10700 followed by 10400 strike price for 28th February series. Short buildup was seen at strike prices 10700-11100.
  • For Bank Nifty, Maximum Call Open Interest (OI) stands at 27500 Strike Price and Maximum Put Open Interest stands at 27500 Strike Price.
  • As per Wednesday’s Provisional Data available on the NSE, FII’s bought shares worth Rs. 694.97 crores in the Indian Equity Market. DIIs too bought shares worth Rs. 525.26 crores in the Indian Equity market.
  • Long Buildup: RELIANCE, GAIL, HAVELLS, TATA STEEL, TCS.
  • Short Buildup: VOLTAS, MUTHOOTFIN, BHARATFIN, BIOCON.
  • Short Covering: LUPIN, TATA MOTORS, PFC, L&TFH, CANBK.
  • Long Unwinding: INDUSIND, FEDERAL BANK, NIITECH, IGL.
  • Stocks banned in F&O segment for today: DHFL, IDBI, JETAIRWAYS, RELCAP, RELINFRA.
Markets Update: February 7, 2019 – Today’s action in the Markets
Markets Update: February 7, 2019 – Today’s action in the Markets

State of Flux!

SGX Nifty in early action is indicating a subdued open. That said, undercurrent likely to be strong  as in yesterday’s trade, the FIIs were again net buyers to the tune of Rs. 694.97 crores and the DIIs camp too mopped up shares worth Rs. 525.26 crores.

In February month, FIIs are net buyers to the tune of 2319.38 Cr.

7 am Update:

DOW (-21, 2539)

NASDAQ (-27, 7375)

SGX NIFTY (-22, 11083)

NIKKEI (-161, 20713)

HANG SENG (CLOSED, 27990)

BOVESPA (-3675, 94635)

OIL (-0.28,  $53.74)

GOLD (-4, $1311)

China’s financial markets are closed all week for the Lunar New Year holiday.

SUCCESSFUL INVESTING IS ANTICIPATING THE TRENDS OF:

Global: Negative.

FII: Positive.

DII: Positive.

F&O: Positive.

‪Sentiment: Positive.

NIFTY’s  CRUCIAL LEVELS:

Nifty’s CURRENT MARKET PRICE: 11,062.

Nifty’s  SUPPORT:

Intraday: 10,969/10,901.

Medium Term: 10,813/10,583.

Long Term: 9,951.

Nifty’s  RESISTANCE:

Intraday: 11,111.

Medium Term: 11,251/11,501.

Long Term: 11,751.

Nifty’s  RANGE:

Intraday: 10,969-11111.

Medium Term: 10,801-11,251.

Long Term: 10301-11,701.

Nifty’s  OUTLOOK

Intraday: Positive.

Medium Term: Neutral.

Long Term: Positive.

Our call of the day says the benchmark Nifty likely to start the day on a positive note, but we suspect, after a higher open the benchmarks are likely to seesaw around the break even line as investors turn their attention to the biggest event of the day: RBI Policy meet outcome!

Our chart of the day suggests establishing long positions in stocks like BRITANNIA, NESTLE &  DABUR with interweek perspective.

Q3 EARNINGS TO TRICKLE IN THIS WEEK:

  • 7-Feb: Tata Motors, Aurobindo Pharma, Britannia, Adani Enterprises, Coffee Day, Cadila Healthcare, Arvind and Grasim.
  • 8-Feb: Mahindra & Mahindra, NHPC, BPCL and Engineers India.

IMPORTANT THEMES FOR THE DAY:

This will be the first monetary policy committee (MPC) meeting under governor Shaktikanta Das, and the outcome will be a close call.

But the good thing for the bulls camp is that the MPC meeting is on backdrop of a already dovish Federal Reserve. The street is also hoping for a rate cut by RBI and a softer stance in wake of easing inflation, lower commodity prices, and weaker growth momentum.

That said, MPC outcome likely to be a close call as on the other hand, the street is nervous on fear of fiscal slippages due to series of welfare schemes announced in the budget. Also as election approaches pre-election spending and political risks will remain high.

Long story short: MPC may hold rates, that said a strong dovish tilt quite likely.

So all anxious eyes turn to RBI Monetary Policy outcome to be wired at 11.45 am followed by RBI Governor Speech at 12.00 pm.

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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