Markets Update: February 05, 2019 – Today’s action in the Markets

16:00 Hrs: Latest After the Closing Bell

Nifty (+22, 10934): Nifty ends in green for fourth consecutive day

Despite volatility and trading up-and down for most part of the day, the benchmark Nifty made a strong close, and most importantly ended in green for 4th consecutive session.

The positive takeaway from today’s trade is that Nifty did held the psychological 10900 and is now well above the mentioned support of 10813 mark.

Now technically speaking, and judging by today’s price action at Dalal Street, the benchmark Nifty is likely to zoom above the psychological 11000 mark. Above 11000, Nifty will gear up for a big rally which should take Nifty towards 11111 mark. The must watch support for Nifty from here on is at 10813 mark.

From here on the biggest date to watch is 7th February 2019. Yes, with Budget 2019 done and dusted, all anxious eyes will now be on the Reserve Bank of India as to how it will react on Budget announcements in its policy review.

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

GLOBAL UPDATE:

DOW Futures (+63, 25251)
NASDAQ Futures (+13, 6950)
DAX (+121, 11297)
FTSE (+80, 7114)

OIL (+0.59, $55.17)
GOLD (-2, $1317)
DOLLAR INDEX (+0.10, 95.93)
COPPER (+13, 66201)

How Asia fared today:

HANG SENG (CLOSED, 27990)
NIKKEI (-39, 20844)
SHANGHAI (CLOSED, 2618)

Nifty (+22, 10934)
Sensex (+34, 36616)
Bank Nifty (+85, 27272)
SGX NIFTY (+0, 10960)
USD/INR (-0.13, 71.67)

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

Nifty (+26, 10939): Nifty has moved up impressively considering the fate of momentum stocks which are just trading with negative bias.

Bias on Nifty continues to be positive with hurdles for Nifty now seen at 11001 mark. The make-or-break support levels on Nifty are at 10813. All eyes now on the dispute between the U.S. and China over technology development, and trade following meetings in Washington last week.

The said talks ended in Washington last week without word of a deal, though those involved — including President Donald Trump — were optimistic about the road ahead.

Probable BTST/STBT trades:

Bullish looking BTST stocks: UPL.

Negative looking STBT stocks: PFC, REC, MCX, M&M FINANCE, CUMMINS, TATA COMMUNICATIONS, BPCL.

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14:00 Hrs: Life at Dalal Street after Europe’s Opening Bell

Nifty in positive zone in afternoon trade but stocks are simply struggling. The market breadth is weak and most importantly relatively narrow at Dalal Street in terms of leadership.

To put it straight, the generals are leading the charge, but none of soldiers are seen following implication of this could be that we may witness volatile sessions in near term.

DAX (+7, 11183)
FTSE (+38, 7072)

DOW Futures (-13, 25175)
NASDAQ Futures (-4, 6935)

HANG SENG (CLOSED, 27990)
NIKKEI (-39, 20844)
SHANGHAI (CLOSED, 2618)

Nifty (+44, 10956)
Bank Nifty (+139, 27326)

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12:00 Hrs: Dalal Street’s Top Stories at Midday

(Nifty 10941, UP 28 points): Dalal Street is attempting to zoom this Tuesday, as momentum stocks now seen treading water amidst an already-positive and constructive Nifty’s technical backdrop, especially after yesterday’s finish.

Against this backdrop, the benchmark Nifty’s next resistance is at 11,111 mark.

The renewed optimism is on backdrop of:

1. Positive developments in U.S-China trade talks.

2. Sentiments continue to benefit from a dovish Federal Reserve after the central bank last week signaled rate increases were on hold until further notice.

3. Hopes of a rate cut by RBI at its policy meeting on Thursday, 7th February. The street expects a softer stance from the central bank in the wake of easing inflation.

The other key highlights of today’s trade:

Amongst sectoral indices: NSE MEDIA is a star performer today, up 1.90% followed by NSE AUTO index which is trading with positive bias, up 1%. IT shares were mixed. The biggest loser is NSE REALTY index, down 0.76%.

• The market breadth, indicating the overall health of the market is negative.

• NSE Advances 9. NSE declines 41.

• The NSE Mid-Cap index is up 0.01% at 4,681. The NSE Small-Cap index is down 0.24% at 6,033.

• In F&O space, DHFL, DIVISLAB & TITAN are in green, up 5.26%, 5.25 & 5.09% respectively; while on flip side RCOM, RPOWER & RELCAPITAL are down 37.07%, 28.22% & 17.53 respectively.

Q3 RESULTS TO TRICKLE IN: Mahindra, GAIL, HPCL, ACC, BHEL, Punjab National Bank, Oriental Bank of Commerce, IDFC First Bank, DLF, Apollo Tyres, Tata Global and Dish TV.

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10:30 Hrs: Pursue Opportunities in commodities

Gold pauses. Signs of slowing U.S., Venezuela output remain supportive factors for Crude-oil.

Gold (-1, 1319): Buy only on corrective declines.
MCX Gold (-0.12%, 33472). Interweek strategy: BUY between 33001-33251 zone, targeting 33901 and then at 34751-35001 zone with stop at 32751.

Silver (+0.16, 15.91): Positive bias to continue.
MCX Silver (+0.13%, 40675): Interweek strategy: Buy between 40001-40101 zone, targeting 41698 mark and then aggressive targets at 41751-42001 zone with stop at 39301.

Crude Oil (+0.39, 54.62). 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 (-0.51%, 3950). Interweek strategy: Aggressive traders can look to establish buy at CMP, targeting 4071 and then at 42751-4315 zone with stop at 3611.

Copper (+0.001, 2.775): U.S-China trade trade truce key positive catalyst.
MCX Copper (-0.11%, 447): Interweek strategy: Establish buy positions between 433-435 zone, targeting 451 mark and then aggressive targets at 457 with stop at 421.

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10:00 Hrs: Nifty’s Crucial Levels

Nifty’s (-12, 10899): Technically, the benchmark Nifty is on the brink of escaping from a major sell-off after it bounced from its most watched 10813 support. (Friday’s & Monday’s intraday low).

Confirmation of strength ONLY if Nifty moves above 10931 mark) Above 10931, Nifty could simply zoom towards 11111 mark. All eyes now turn to the biggest event of the week: RBI Policy meet outcome on 7th February.

What Technical Tells Us On Nifty:

Nifty’s KEY SUPPORTS: 10813/10737/10583.
Nifty’s KEY HURDLE: 11001/11111.

Nifty’s INTRADAY RANGE: 10875-10975.
Nifty’s OUTLOOK FOR THE DAY: Buy on dips.

Q3 Results to trickle in: Mahindra, GAIL, HPCL, ACC, BHEL, Punjab National Bank, Oriental Bank of Commerce, IDFC First Bank, DLF, Apollo Tyres, Tata Global and Dish TV.

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09:30 Hrs: Make Informed Decisions

(Nifty: -11, 10901): In early action, Nifty trades sluggish and with caution, perhaps on backdrop of Chinese & Hang Seng stock markets which are closed on account of Lunar holidays. The make or break intraday support for Nifty continues to be at 10813 mark. Nifty hurdles are at 11001 zone.

Stocks are seen simply languishing. Jubilant Foods tanks 3.50% as the firm found guilty of not passing Rs 41.42 cr GST benefit on sale of Dominos Pizza products.

Amongst stocks on positive side are: HEROMOTO CORP (+1.62%, 2825) DR REDDYS LAB (+1.53%, 2778) UPL (+1.19%, 780)

On the negative side are BHARTI AIRTEL (-3.70%, 295) IBULLSSGFIN (-1.66%, 640) INFRATEL (-1.54%, 290).

The Indian rupee opened higher by 10 paise at 71.70 per dollar

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

DOW FUTURES (-12, 25206)
NASDAQ FUTURES (-5, 6932)
SGX NIFTY (+18, 10966)
NIKKEI (-9, 20870)
HANG SENG (CLOSED, 27924)
SHANGHAI (1st Feb Closing Price at 2618).

STOCKS TO WATCH:

• Bullish stocks: IGL, MGL, HUL, PNB, UPL, NIIT TECH, BIOCON, LUPIN, VOLTAS, TITAN, DIVIS LAB..

• Bearish stocks: MRF, ADANI PORTS, MCX, AJANTA PHARMA, BPCL, HPCL, RELIANCE POWER, RELIANCE CAPITAL, BHEL, NALCO.

SHOW ME THE MONEY: BUY VOLTAS (CMP 544): VOLTAS is witnessing strong momentum seen on the upside. The make-or-break support level is at 531. Interweek Strategy: Buy between 537-541 zone, targeting 575 and then at 589-591 zone. Stop 527.

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

Positive global cues likely to keep optimism alive at Dalal Street.

Preferred trade on Nifty (10913): Buy between 10900-10915 zone, targeting 11001 and then at 11111-11251 zone with strict stop at 10777.

Preferred trade on Bank Nifty (27187): Key near term supports at 26301. Confirmation of strength only above 27751. Buy between 26951-27001 zone, targeting 27751 and then at 28101-28251 mark with strict stop at 26301.

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08:00 Hrs: Calculus Derivatives Corner

Markets Update: February 05, 2019 – Today’s action in the Markets

Subdued action seen from the FIIs camp and the DIIs camp in yesterday’s trade.

This February, the FIIs have bought worth Rs. 1203.75 cr. Please note, Foreign investors had pulled out more than Rs 5,300 crore from the Indian equity markets in January 2019.

Market Summary:

• Nifty 28th February Futures ended Monday’s session at a premium of +25 against +24.

• The Put- Call Open Interest Ratio was at 1.42 for Nifty whereas it was 1.54 for Bank Nifty.

• The Put-Call Volume Ratio was at 0.99 for the Nifty and 1.04 for Bank Nifty.

• For Nifty, Maximum Call Open Interest (OI) stands at 11000 Strike Price, followed by 11200 Strike Price for 28th February Series. Long build-up was seen at strike prices 10800-10900.

• 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 10500-10900.

• 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 Monday’s Provisional Data available on the NSE, FII’s sold shares worth Rs. 112.13 crores in the Indian Equity Market. DIIs too sold shares worth Rs. 65.22 crores in the Indian Equity market.

• Long Buildup: RELIANCE, IGL, TITAN, TCS, HDFC.

• Short Buildup: ADANI PORTS, YES BANK, PETRONET, APOLLO TYRES, IBHSGFIN.

• Short Covering: FEDERAL BANK, EICHER, TORRENT PHARMA.

• Long Unwinding: DLF, MFSL, CESC, ZEEL.

• Stocks banned in F&O segment for today: DHFL, IDBI

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

Markets Update: February 05, 2019 – Today’s action in the Markets

SGX Nifty in early action is indicating that our stock markets will open with strong gains.

The bulls likely to celebrate as UK clears Vijay Mallya’s extradition to India. Well as per reports, the entire procedure to bring back Mallya to India may take only 7-8 months if he uses all his legal options.

GLOBAL UPDATE:

DOW (+175, 25239)
NASDAQ (+84, 7348)
SGX NIFTY (+3, 10951)
NIKKEI (-22, 20863)
HANG SENG (CLOSED, 27990)
BOVESPA (+728, 98589)

OIL (+0.07, $54.64)
GOLD (-3, $1317)

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

SUCCESSFUL INVESTING IS ANTICIPATING THE TRENDS OF:

Global: Positive.
FII: Neutral.
DII: Neutral.
F&O: Positive.
‪Sentiment: Bullish.

NIFTY’s CRUCIAL LEVELS:

Nifty’s CURRENT MARKET PRICE: 10,912.

Nifty’s SUPPORT:
Intraday: 10,851/10,813.
Medium Term: 10,583/10,333.
Long Term: 9,951.

Nifty’s RESISTANCE:
Intraday: 11,001/11111.
Medium Term: 11,221/11,501.
Long Term: 11,701.

Nifty’s RANGE:
Intraday: 10,875-10975.
Medium Term: 10,333-10,921.
Long Term: 9,951-11,701.

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

Our call of the day suggests that Nifty likely to step higher above 11,000 mark. Major hurdles seen at 11,111 mark. Positive bias on Nifty as long as 10813 support is held.

Our chart of the day suggests establishing long positions in stocks like RBK BANK, MAHANAGAR GAS & INDRAPRASTHA GAS (IGL) with interweek perspective.

Q3 EARNINGS TO TRICKLE IN THIS WEEK:

• 5-Feb: Mahindra, GAIL, HPCL, ACC, BHEL, Punjab National Bank, Oriental Bank of Commerce, IDFC First Bank, DLF, Apollo Tyres, Tata Global and Dish TV.

• 6-Feb: Lupin, Cipla, Siemens, Adani Ports, Adani Power, JSW Steel and Allahabad Bank.

• 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 morning the renewed optimism is on backdrop of:

1. Positive developments in U.S-China trade talks. U.S. President Donald Trump’s weekend remarks that trade talks with Beijing are “doing very well”. U.S.-China trade talks will remain in focus as a March 1 deadline to avoid an increase on tariffs on Chinese imports looms

2. Sentiments continue to benefit from a dovish Federal Reserve after the central bank last week signaled rate increases were on hold until further notice.

3. Hopes of a rate cut by RBI at its policy meeting on Thursday, 7th February. The street expects a softer stance from the central bank in the wake of easing inflation.

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