Representational Pic
Representational Pic

16:00 Hrs: Latest After the Closing Bell

Nifty (+128, 11062): Nifty ends in green for fifth consecutive day.

The benchmarks Nifty & Sensex were seen racing on their BMW’s & Mercedes as Nifty ended above the important psychological 11,000 mark while the Sensex was just shy of its magical 37,000 mark.

That said, the average stocks were in a pickle. The WOW feeling was missing!

Broader market underperformed. The market breadth, indicating the overall health of the market, was negative. The BSE Mid-Cap index fell 0.12%. The BSE Small-Cap index rose 0.05%. Both the indices were seen underperforming severely.

Now technically speaking, and judging by today’s price action at Dalal Street, the benchmark Nifty is likely to inch towards its make-or-break hurdles at 11,111 mark.

The biggest catalyst for tomorrow’s trade will RBI’s policy meet.*

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.

Meanwhile, at the time of writing, there was little reaction to President Donald Trump’s State of the Union address. Now before we sign off for the day, let’s look at major instruments.

4.00 PM GLOBAL UPDATE:

DOW Futures (-49, 25275)
NASDAQ Futures (-7, 7001)
DAX (-37, 11331)
FTSE (-5, 7173)

OIL (-0.67, $52.99)
GOLD (-2, $1317)
DOLLAR INDEX (+0.08, 96.16)
COPPER (+12, 6238)

How Asia fared today:

HANG SENG (CLOSED, 27990)
NIKKEI (+30, 20874)
SHANGHAI (CLOSED, 2618)

Nifty (+128, 11062)
Sensex (+364, 36981)
Bank Nifty (+131, 27402)
SGX NIFTY (+0, 11105)
USD/INR (-0.02, 71.54)

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

Nifty (+125, 11060): 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 11111 mark. All eyes now turn to the biggest event of the week: RBI Policy meet outcome on 7th February.

Probable BTST/STBT trades

Bullish looking BTST stocks: INDIGO, UPL, BAJAJ FINANCE, NESTLE, GODFREY PHILPS, KPIT, PNB.

Negative looking STBT stocks: LUPIN, PIDILITE

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14:30 Hrs: Dalal Street’s Top Stories at 02:30 PM

(Nifty 11052, UP 118 points):

• The benchmarks, Sensex and Nifty are aiming for the fifth straight day of gain this Wednesday.

• Nifty approaches its crucial resistance at 11111 mark.

• The street is hoping for a rate cut by RBI at its policy meeting tomorrow, i.e. Thursday, 7th February. The street expects a softer stance from the central bank in the wake of easing inflation.

• All sectoral indices are trading in green with NSE MEDIA index being a star performer today, up 4.08% followed by NSE METAL index which is trading with positive bias, up 1.83%.

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

• NSE Advances 42. NSE declines 7.

• The NSE Mid-Cap index is down 0.78% at 4,596. The NSE Small-Cap index is down 0.21% at 5,947.

• In F&O space, DHFL, DIVISLAB & TITAN are in green, up 5.26%, 5.25 & 5.09% respectively; while on flip side RELIANCE INFRA, RELCAPITAL and TATA CHEMICALS are down 36.13%, 9.30% & 8.21% respectively.

Q3 RESULTS TO TRICKLE IN: Lupin, Cipla, Siemens, Adani Ports, Adani Power, JSW Steel and Allahabad Bank.

• The Indian rupee is trading lower by 8 paise 71.64 per dollar versus previous close 71.56.

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

The benchmark Nifty continues to trade with strength and now near its most important hurdles at 11111 mark. The market breadth however is weak and most importantly relatively narrow at Dalal Street in terms of leadership.

You can say that the Nifty is plying in BMW & Mercedes of the world while the average stock is still in pickle. At the time of writing, there was little reaction to President Donald Trump’s State of the Union address.

DAX (-25, 11342)
FTSE (-18, 7158)

DOW Futures (-40, 25284)
NASDAQ Futures (-3, 7005)

HANG SENG (CLOSED, 27990)
NIKKEI (+30, 20874)
SHANGHAI (CLOSED, 2618)

Nifty (+121, 11057)
Bank Nifty (+124, 27396)

Positive sentiment at our stock markets have been supported by reports from Washington, citing unnamed sources, that say U.S. Trade Representative Robert Lighthizer and Treasury Secretary Stephen Mnuchin plan to travel to bejing next week for round of talks aimed at resolving trade and technology-related disputes that have led to both sides imposing tariffs on billions of dollars’ worth of each other’s products.

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10:30 Hrs: Pursue Opportunities in Commodities

Copper rebounds. Initial upside now seen at 457.

Gold (-1, 1318): Buy only on corrective declines.
MCX Gold (-0.10%, 33335). Interweek strategy: BUY between 33001-33251 zone, targeting 33901 and then at 34751-35001 zone with stop at 32751.

Silver (-0.024, 15.812): Positive bias to continue.
MCX Silver (-0.11%, 40316): Interweek strategy: Buy between 40001-40101 zone, targeting 41698 mark and then aggressive targets at 41751-42001 zone with stop at 39301.

Crude Oil (+0.04, 53.70). 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 (+0.05%, 3848). Interweek strategy: Aggressive traders can look to establish buy at CMP, targeting 4071 and then at 42751-4315 zone with stop at 3611.

Copper (+0.006, 2.823): U.S-China trade trade truce key positive catalyst.
MCX Copper (+0.18%, 446.65): Interweek strategy: Establish buy positions between 437-441 zone, targeting 457mark and then aggressive targets at 471 with stop at 431.

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10:00 Hrs: Nifty’s Crucial Levels

Nifty’s (+75, 11011): 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 if Nifty moves above 11111 mark) Above 11111, Nifty could simply zoom towards 11751 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: 10941/10891/10813.
Nifty’s KEY HURDLE: 11111.

Nifty’s INTRADAY RANGE: 10945-11045.
Nifty’s OUTLOOK FOR THE DAY: Buy on corrective declines.

Q3 Results to trickle in today: Lupin, Cipla, Siemens, Adani Ports, Adani Power, JSW Steel and Allahabad Bank.

Key events for tomorrow, 7th February, 2019.

RBI Monetary Policy @ 11.45 am

RBI Governor Speech @ 12.00 pm

UK BoE Monetary Policy @ 17.30 pm

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09:30 Hrs: Make Informed Decisions

(Nifty: +69, 11002): Nifty zooms above 11000 mark in early action, supported by FIIs buying in yesterday’s trade to the tune of Rs. 420.65 crores in the Indian Equity Market. In February month, FIIs are net buyers to the tune of 1624.41 Cr.

Nifty hurdles now are at 11111 mark.

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

Amongst stocks on positive side are: TECH MAHINDRA (+5.15%, 790) ZEE ENTERTAINMENT (+1.87%, 380) IBULLSHSGFIN (+2.15%, 659).

On the negative side are: BHARTI AIRTEL (-1.07%, 295) DRREDDYS LAB (-0.83%, 2798) INDUSIND BANK (-0.70%, 1531). Amidst a strong domestic stock market, the Indian rupee opened higher by 29 paise at 71.51 per dollar

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08:00 Hrs: Calculus Derivatives Corner

FIIs were net buyers in yesterday’s trade Rs. 420.65 crores in the Indian Equity Market. In the month of February, FIIs are still net buyers to the tune of 1624.41 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 Tuesday’s session at a premium of +21 against +25.

• The Put- Call Open Interest Ratio was at 1.44 for Nifty whereas it was 1.57 for Bank Nifty.

• The Put-Call Volume Ratio was at 1.08 for the Nifty and 0.95 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 11100-11300.

• 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 10700-11000.

• 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 Tuesday’s Provisional Data available on the NSE, FII’s bought shares worth Rs. 420.65 crores in the Indian Equity Market. DIIs too bought shares worth Rs. 194.31 crores in the Indian Equity market.

• Long Buildup: AXIS BANK, TECHM, IGL, DR REDDY, UPL.

• Short Buildup: ONGC, PC JEWELLER, CGPOWER, TATA GLOBAL.

• Short Covering: ZEEL, GAIL, M&M, TVS MOTOR, HEROMOTO.

• Long Unwinding: JUBLFOOD, CESC, RELIANCE, STAR.

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

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

Markets Update: February 6, 2019 – Today’s action in the Markets

SGX Nifty in early action is indicating that our stock markets will open with strong gains as overnight all the major U.S. stock market indices finished in the green.

At the time of writing, Donald Trump is on watch. Trump is set to deliver the second State of the Union address of his presidency, as investors may latch on to key elements of the speech to garner insights in the wake of a bitter, 35-day partial government shutdown alongside a protracted tariff battle with China.

GLOBAL UPDATE:

DOW (+172, 25411)
NASDAQ (+55, 7402)
SGX NIFTY (+61, 11010)
NIKKEI (+81, 20925)
HANG SENG (CLOSED, 27990)
BOVESPA (-277, 98311)

OIL (+0.05, $53.72)
GOLD (-1, $1318)

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

SUCCESSFUL INVESTING IS ANTICIPATING THE TRENDS OF:

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

NIFTY’s CRUCIAL LEVELS:

Nifty’s CURRENT MARKET PRICE: 10,934.

Nifty’s SUPPORT:
Intraday: 10,891/10,813.
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: 10,901-11025.
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 says that the benchmarks are on track for 5th win in a row on backdrop of buoyant mood at global stock markets

We suspect, Nifty to step higher above 11,000 mark and move towards its major hurdles 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 & UPL with interweek perspective.

Q3 EARNINGS TO TRICKLE IN THIS WEEK:

• 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.

4. FIIs were net buyers in yesterday’s trade Rs. 420.65 crores in the Indian Equity Market. In February month, FIIs are still net buyers to the tune of 1624.41 Cr.

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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