Uncertainty - Passing Clouds or Gathering Storm?
AFP PHOTO / PUNIT PARANJPE
Uncertainty - Passing Clouds or Gathering Storm? AFP PHOTO / PUNIT PARANJPE

16:00 Hrs: Latest After the Closing Bell

Nifty (-55, 10889): Modest losses for Nifty.

The benchmark Nifty witnessed further setback as investors continued worrying about heath of global economy.

The negative takeaway from today’s trade was that bears continued to dominate despite the FIIs buying to the tune of Rs. 843.73 crores in Friday’s trade. Dalal Street was also unable to join the conga line of rebounding Asian and European markets in today’s trade. There were hopes on worldwide stock markets in today’s trade amidst reports that American and Chinese officials will make progress on a wide-ranging dispute on the fresh round of trade talks this week in Beijing.

Dow jones futures to were seen climbing on these positive reports.

Now technically speaking, and judging by today’s price action at Dalal Street, the benchmark Nifty slip further towards its crucial make-or-break support at 10778 mark. Buying on dips could be the preferred strategy for aggressive bullish traders.

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.

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

GLOBAL UPDATE:

DOW Futures (+94, 25175)
NASDAQ Futures (+35, 6952)
DAX (+122, 11029)
FTSE (+69, 7141)

OIL (-0.24, $52.48)
GOLD (-8, $1310)
DOLLAR INDEX (+0.18, 96.83)
COPPER (-27, 6174)

How Asia fared today:

HANG SENG (-197, 28143)
NIKKEI (CLOSED, 20333)
SHANGHAI (+36, 2654)

Nifty (-55, 10889)
Sensex (-152, 36395)
Bank Nifty (-67, 27228)
SGX NIFTY (+0, 10931)
USD/INR (-0.12, 71.18)

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

Nifty (-48, 10895): Nifty has shaken some of its morning losses but the broader markets are waiting for direction yet again, and that direction depends on the outcome of fresh round of trade talks between the United States and China this week in Beijing.

Support for Nifty seen at 10887 mark.

Probable BTST/STBT trades

Bullish looking BTST stocks: BEML, NIIT TECH, MINDTREE, VOLTAS

Negative looking STBT stocks: BERGER PAINTS, M&M, TATA POWER

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

A rough session seen at Dalal Street as investors are unable to quell their fears over U.S-China trade relations and global growth.
That said, markets in China and Taiwan have reopened after a weeklong Lunar New Year break, and have edged higher on hopes that American and Chinese officials will make progress on a wide-ranging dispute that has weighed on the global economy. At the time of writing Europe too was trading in green.
Amidst this backdrop, downside on Nifty likely to be limited at 10787 mark.
All anxious eyes now will be on the fresh round of trade talks between the United States and China this week in Beijing.
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.
DAX (+47, 10953)
FTSE (+46, 7118)
DOW Futures (-25, 25056)
NASDAQ Futures (-10, 6907)
HANG SENG (+198, 28143)
NIKKEI (CLOSED, 20333)
SHANGHAI (+36,  2654)
Nifty (-59, 10884)
Bank Nifty (-83, 27210)

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10:30 Hrs: Pursue Opportunities in commodities

Oil could slip on backdrop of sharp decline on energy demand risks and a possible boost to Libya output. Iron ore is being rocked by the crisis at Brazil’s Vale SA, with prices surging to the highest in years on concern over a supply crunch.

Gold (-1, 1315): Buy only on corrective declines.
MCX Gold (-0.12%, 33135). Interweek strategy: BUY between 32901-33101 zone, targeting 33601 and then at 33901 and then finally at 34751-35001 zone with stop at 32751.

Silver (-0.39%, 15.74): Positive bias to continue.
MCX Silver (-0.31%, 39980): Interweek strategy: Buy at CMP, targeting 40750 mark and then aggressive targets at 41500-41698 zone with stop at 39301.

Crude Oil (-0.70, 52.02). Key support remains at 49 zone. Interweek strategy: Establish sell positions at CMP, targeting, 51 and then at 49 and finally at 45-46 zone with strict stop at 55.
MCX Crude Oil (-1.31%, 3711). Oil may slips amidst global growth concerns. Interweek strategy: Aggressive traders can look to establish buy positions only abbove 3911.

Copper (-52, 6148): U.S-China trade truce likely to be key catalyst.
MCX Copper (-0.11%, 438): Interweek strategy: Establish sell positions between 445-449 zone, targeting 433 mark and then aggressive targets at 421-427 zone with stop at 461.

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10:00 Hrs: Nifty’s Crucial Levels

Nifty’s (-79, 10865): Nifty continues to trade depressed as bears pick up the selling baton from Friday’s trade. The market breadth, indicating the overall health of the market is negative.

Technically, the benchmark Nifty faces major hurdles at 11,000 mark. Confirmation of strength only if Nifty closes above 11125 mark.

All eyes now turn to the biggest near term support on Nifty at 10787 mark.

What Technical Tells Us On Nifty:

Nifty’s KEY SUPPORTS: 10801/10787.
Nifty’s KEY HURDLE: 10965/11001.

Nifty’s INTRADAY RANGE: 10821-10951.
Nifty’s OUTLOOK FOR THE DAY: Caution Advised.

Q3 Results to trickle in today: Amara Raja Batteries, Andhra Bank, Astral Poly, Eicher Motors, Hindustan Aeronautics, India Cements, SpiceJet.

Dr Reddy’s Labs slips after plant was issued Form 483 with 11 observations by the US Food and Drug Administration on Friday.

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09:30 Hrs: Make Informed Decisions

(Nifty: -47, 10896): Nifty trades with negative bias despite positive Asian indices. Nifty hurdles now are at 10971 mark.

Amongst stocks on positive side are: TATA STEEL (+1.29%, 475) TECHM (+0.91%, 813) ZEEL (+0.87%, 402)

On the negative side are: IBHSGFIN (-3.86%, 581) DRREDDY (-3.21%, 2681) M&M (-2.08%, 668).

USD/INR opened higher by 2 paise at 71.45

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

Today, Japan is shut for a holiday. China, Hong Kong reopen on a positive note after a one-week holiday.

DOW FUTURES (-17, 25085)
NASDAQ FUTURES (-5, 6912)
SGX NIFTY (-9, 10938)
NIKKEI (CLOSED, 20333)
HANG SENG (+80, 28026)
SHANGHAI (+19, 2638).

STOCKS TO WATCH:

Caution will continue to be the buzzword as the market breadth continues to be weak and most importantly relatively narrow at Dalal Street in terms of leadership.

• Bullish stocks: UPL, Dr. LAL PATH LABS, TEAMLEASE, PI INDUSTRIES, DABUR, LTI.

• Bearish stocks: PFC, UBI, OBC, PNB, BOI, CUMMINS, KSCL, TATA COMMUNICATION, MCX, MRF, NALCO.

SHOW ME THE MONEY: SELL KAJARIA CERAMICS (CMP 534): The interweek/intermonth risk is on the downside as long as 557 resistance is held with aggressive downside targets at 499. Interweek Strategy: Sell between 539-543 zone, targeting 514 and then at 499-503 zone with stop above 557.45.

Q3 RESULTS TO TRICKLE IN TODAY:

• Amara Raja Batteries, Andhra Bank, Astral Poly, Eicher Motors, Hindustan Aeronautics, India Cements, SpiceJet.

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

The bears will pick up the selling baton from Friday’s negative trade.

Preferred trade on Nifty (10944): Sell between 10971-10989 zone, targeting 10901 and then at 10788-10801 zone with strict stop at 11141.

Preferred trade on Bank Nifty (27294): Key near term supports at 26381. Confirmation of strength only above 27751. Buy only on any sharp declines between 26951-27101 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 11, 2019 – Today’s action in the Markets

Liquidity still in favor of the bulls.

In Friday’s trade, the FIIs were again seen as net buyers to the tune of Rs. 843.73 crores. Digging deeper, the FIIs inflows were worth Rs. 2900 cr in last week and so far in February, FIIs have made net purchases to the tune of Rs 3,581 crore.

Market Summary:

• Nifty 28th February Futures ended Friday’s session at a premium of +0.1 against +13.

• The Put- Call Open Interest Ratio was at 1.27 for Nifty whereas it was 0.95 for Bank Nifty.

• The Put-Call Volume Ratio was at 1.61 for the Nifty and 1.33 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 buidlup was seen at strike price 10950-11200.

• 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 10700-11200.

• 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 bought shares worth Rs. 843.73 crores in the Indian Equity Market. DIIs on the other hand, sold shares worth Rs. 960.04 crores in the Indian Equity market.

• Long Buildup: DIVIS LABS, BAJFIN, MARICO.

• Short Buildup: SAIL, TATA MOTORS, UNION BANK, M&M, COAL INDIA.

• Short Covering: DLF, LUPIN, JUBLFOOD.

• Long Unwinding: SBIN, AXIS BANK, RELIANCE, RBL BANK, MRPL.

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

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

Markets Update: February 11, 2019 – Today’s action in the Markets

They say, ‘If it looks like a top, feels like a top, and sounds like a top then it’s probably the top’.

The landscape will change to bullish only if we can knock off U.S-China trade issues from the front pages. Until then, it’s not over till it’s over.

GLOBAL UPDATE:

DOW (-63, 25106)
NASDAQ (+10, 7298)
SGX NIFTY (-15, 10933)
NIKKEI (CLOSED, 20333)
HANG SENG (-6, 27939)
BOVESPA (+937, 95343)

OIL (-0.53, $52.19)
GOLD (-1, $1318)

SUCCESSFUL INVESTING IS ANTICIPATING THE TRENDS OF:

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

NIFTY’s CRUCIAL LEVELS:

Nifty’s CURRENT MARKET PRICE: 10,944.

Nifty’s SUPPORT:
Intraday: 10901/10,787.
Medium Term: 10,721/10,583.
Long Term: 9,951.

Nifty’s RESISTANCE:
Intraday: 10989, 11125.
Medium Term: 11,125/11,501.
Long Term: 11,751.

Nifty’s RANGE:
Intraday: 10,875-10989.
Medium Term: 10,501-11,125.
Long Term: 10301-11,701.

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

Our call of the day suggests ‘Cash will be king — until Nifty is unable to move above its crucial hurdles at 11125 mark’.

Our chart of the day suggests establishing short positions in stocks like ORIENTAL BANK OF COMMERCE, PFC & BPCL with interweek perspective.

Q3 EARNINGS TO TRICKLE IN THIS WEEK:

• 11-Feb: Amara Raja Batteries, Andhra Bank, Astral Poly, Eicher Motors, Hindustan Aeronautics, India Cements, SpiceJet.

• 12-Feb: Bata India, Coal India, Container Corporation, HEG, Hindalco, Karur Vysya Bank, Manpasand Beverages, NCC, and Sun Pharma.

• 13-Feb: Adani Gas, Godrej Industries, Lemon Tree Hotels, Prabhat Dairy, Reliance Capital and Ruchi Soya.

• 14-Feb: Glenmark Pharma, GVK Power, HDIL, Infibeam, MTNL, Nestle India, ONGC, Tata Teleservices, United Breweries, and Voltas.

IMPORTANT THEMES FOR THE DAY:

Here are the key catalysts that caught our eye in last 36 hours:

Further setback quite likely at Dalal Street as investors resume worrying about heath of global economy. That’s the takeaway from Friday’s trade at Dalal street where investors found no place to run and no place to hide. The state of play was dismal, as most of the momentum stocks were bludgeoned and investors scrambling for safety amidst deteriorating global growth concerns.

The bulls will try to keep their love alive for stocks after the FIIs were again seen as net buyers to the tune of Rs. 843.73 crores in Friday’s trade. Digging deeper, the FIIs inflows were worth Rs. 2900 cr in last week and so far in February, FIIs have made net purchases to the tune of Rs 3,581 crore.

But having said that, we suspect Dalal Street will most likely trade the week on a subdued note picking up the selling baton from Friday’s negative trade as the U.S.-China trade war is likely to remain a core issue for investors. Nagging global growth worries on backdrop of China’s slowdown and Europe’s weak data will cap any early morning optimism.

An uninspiring session quite likely in near term for the bulls’ camp as U.S. President Donald Trump confirmed reports that he had no plans to meet with Chinese President Xi Jinping before a March 1 trade-deal deadline. We suspect, the table could turn in favor of bulls only if there is any swift and timely resolution of the trade issue.

U.S. negotiators are preparing to press China this week on longstanding demands that it reform how it treats American companies’ intellectual property in order to seal a trade deal that could prevent tariffs from rising on Chinese imports. Escalating tensions between the United States and China have cost both countries billions of dollars and roiled global financial markets.

Traders’ full focus this would be on the macro numbers to be released this week.

IIP data: The Index of Industrial Production (IIP) print for the month of December will be released on Tuesday. IIP growth stood at 0.47% in November, with the high base of last year contributing to the slowdown. A disappointing IIP data may not augur well for our stock markets.

Inflation print: All anxious eyes will be on the retail & wholesale inflation prints for the month of January 2019 to be released on Tuesday & Thursday respectively. Lower fuel prices had eased India’s retail inflation in December to 2.19% from the annual rate of 2.33% in November. The annual rate of inflation, based on monthly WPI, stood at 3.80% for the month of December 2018 as compared to 4.64% for November. Recently, the RBI cut its repo rate by 25 basis points considering the benign inflation level.

Amongst global economic data, China’s inflation data for January will be keenly watched this week.

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