The value areas for today are 5450-5439-5428 for the Nifty and for the Bank nifty they are 10064-10035-10004.
The markets have opened at 5435 within value.
We had mentioned 5423-5466 as a zone to watch (or 5408-5486) for changes in the momentum of the markets.
Quite visibly in the past two sessions the markets have chosen to rest between these two points.So we will be in for a period of some range bound moves till one of these two points is taken out.
For the past two days, the market has chosen to sell at the open and consolidate the rest of the day.Let's see how today pans out.
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10.49
Today's trade is different as the market waits for a news trigger.
Let's wait for the event to get over. there will be adequate trade opportunities on the other side.
5408-5438 are very good ref points. Either side of which you can get 20 points.
Don't push for a trade. Let the trade come to you.
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12.47
Rising interest rates pull the market up in the very short term but are the first in the process of an economic slowdown.
Infact they are an indicator to what the think tank actually feels about the economy--it is cooling off.
Next if we see falling commodity prices in the market, we have another indication that the slowdown has moved to a 'slump' before we get to the third critical stage which is a 'gloom'.
https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjmFLPbPoJ0yxZL8UzdI4BnBqmZY-SVddg5MYnrUl_ean6bGHiRN1yTFQpCVSQ2XN3hGnI9Ap_uHJTAobjgjjQFLbhIybZTcHaOY0McKFYYgVxPfBgu0SAZINB2e5-47_-Huv-eS0vKflw/s1600-h/cycle.gif
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13.31
It's been that day with a lot of movement around the market profile value area levels given in the morning.
First the market auctioned all morning below value low.
Then came the news trigger and a good rise straight to POC.
Then the market was deciding to stay between POC and VAH or go the other way.
At the moment it is trying to auction above value high, but has failed twice so far.
A break above value high at 1050 decides the day for the buyers.
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Posts
52 comments:
Good Morning Shai!
good Morning Shai
Good Morning!
Is it good to make a long position in nifty @5422
GM Shai and folks!
Here's update from OI land:
http://4.bp.blogspot.com/_xQfPkpQXjMc/TE4zpDoz1sI/AAAAAAAAAq4/fzDLHmOEf1g/s1600/OI_analysis.GIF
Not much changed from Options point of view:
1. 5500 still a mountain to climb with 1.2Cr Calls/16L puts. What's very interesting is the price of 5500CE went down below 10 bucks. Somebody who bought around 10 will make decent profits if Nifty makes run towards 5450-5470
2. 5400 looks ok support with 68L calls/74L puts. If expiry above 5400 is a certainty - more calls need to be covered/puts written there.
Nifty futures:
July: 2.58Cr OI down 15% (45L shares cut from OI) ==> Opportunistic short covering?
Aug: 92L OI up 40% (26L shares added to OI)
Banknifty futures:
July: 19.6L OI down 15% (3.8L shares cut from OI)
Aug: 7.9L OI up 68% (3.2L shares added to OI)
If LT delivers good results today look for possible run ups in Capital goods stocks that were beaten down yesterday (http://finance.indiamart.com/markets/bse/bseCG.html) :
JPASSOCIAT
GMRINFRA
GVKPIL
PUNJLLOYD
EKC
RIIL
Thanks Girish.
Guggu,
Let's wait.
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The seller is there at the open, but disappears later. Let's see if today it is different.
Enter longs only above day high at 5438.
Let's also watch how the market behaves at 5308-5311.
*** 5408-5411.
Shai,
LT has fallen another 2.5% today.
Majority of Nifty stocks have done that this earnings season. Run up before results - fall on the day of results. Some stocks have gievn very results esp BHE & HDFCBANK but still they haven't reached the pre-result levels.
PS: I am not sure when LT results will be announced. Somebody in front of TV might be able to update.
Girish,
Good analysis.
1.5 cr in OI at 5400 will mean volatility around this figure.
Shai Bn window is very storng can we buy here with a SL below 9960
Today's trade is different as the market waits for a news trigger.
Let's wait for the event to get over. there will be adequate trade opportunities on the other side.
5408-5438 are very good ref points. Either side of which you can get 20 points.
Don't push for a trade. Let the trade come to you.
Powertrade,
If you want to-- 9940 is a better SL.
Watch SBI also if long, has to get above 2425 cash.
Thanks shai
BN just out of control just greattttttttttttttttttttttttt
Buy Nifty above 5440 , stop 5426, tgt 5457/ 5466/
good one powertrade.
I had netted 200 points in the last RBI meeting, somee months back. they are high risk-high reward setups.
Me too shai today was a good trade i kept 250 to buy at 9960 and just sold at 10065 ... I call it a day aand still many oppurtunities
Fundamentally Interest rate hikes are bad for Banks, NBFCs and interest rate sensitive sectors like Real Estate and Autos.
I don't understand the logic why market should go up if rate is hiked!
Sorry - we are traders - we should be looking at setups that make money for us.
BTW all of a sudden 15L puts are written @5400!!!
Girish,
I had a chart sometime back, where I had related interest rate hikes with stock indices.
Stocks generally did well when rates were increased.
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It is foolish to write options in the last few days of expiry. Must be some overenthusiastic retail or HNI's.
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exit longs here at 5437
I thought the upmove above 5439 would take the market right upto 5456 at least.
Instead the market stalled at 5448 and came down right below 5439.
To me this is not an indication of a strong trend emerging and more to do with a sideways display we have been witness to.
Hence the decision to scratch out the longs.
Shai,
I am also confused by so many puts written. Also 5400PEs are quite cheap and it could be market makers writing them to influence trader's sentiments for especially for rollovers. It could be dumb retail/HNI too.
And interest rate vs markets - I'll do some reading and come back tomorrow with more data. I felt that lower interest rates would stimulate borrowing/spending/investment cycles and higher interest rate would dampen the same.
Girish,
Fundamentally you are right. But does the market
always obey the fundamental play is the short term?
Thus to equate high interest rates with a fall in market may not be correct. After all, this is the forth time Repo and reverse repo have been raised this year. Fundamentally, BN should have been making lows. Instead,it has been making highs.
any reson shai for exit
Powertrade,
Reason specified above. Risk-reward parameter for the trade changed from the point of entry, hence exit.
Girish,
Fundamentally we write options to gain from time decay. With 2 days to go for expiry, smart money will not write so close strikes with no time premium.
--
I made a exit call with 3 point loss
Rising interest rates pull the market up in the very short term but are the first in the process of an economic slowdown.
Infact they are an indicator to what the think tank actually feels about the economy--it is cooling off.
Next if we see falling commodity prices in the market, we have another indication that the slowdown has moved to a 'slump' before we get to the third critical stage which is a 'gloom'.
Your explanation makes sense Shai.
We have to assess what part of economic cycle we are in before making judgement on the relationship between market and interest rates.
Check this cycle of economic cycle and the stock market : http://3.bp.blogspot.com/_JyY_wsmZ5bI/S0Qvi-qBQSI/AAAAAAAAABY/a2GMQhoTmDo/s1600-h/cycle.gif
Thanks for that nice GIF Shai.
5450 is value high I am watching.
5449.3 is the high so far.
The last time price got rejected from here and we bailed out of our longs.
..But if we get above this now, the market has to move up only.
Chart posted of the Nifty with value areas as ref zones in the action today.
shai, what do u expect on expiry
A classic grave stone doji on daily charts in BN i thing a right place to short here
Shai & all
hi..
very very good post..but the extract of real estate prices in not so much applicable in INdia
for topping out..reason s flow of black money into it..
the ratio stands 20:80 in my town..
do comment..frm whr u hv taken ths cycle chart
Powertrade,
I think I had seen 10200 odd on EOD charts. Will confirm.
Haven got this far, it will be a pity if it does not make the extra 100 points.
Manu,
You are right about the Real estate.
May be the currency markets will bring the downturn next time around.
I had made a post with that chart on this blog way back in Jan :
http://vtrender.blogspot.com/2010/01/crash-2010.html
If you are watching live action you can see how Value high at 5450 is playing out.
First it stopped a move up.
Now it is supporting the move up.
These levels will always work. :) .
"""""Just replace the words ' real estate' with the next sector which will bring the downturn.""""
golden words..whts ur call which sector
can anybody guide me if i can but debt instruments
on nse/bse or mutual funds are d only options..
or any other option which is open ended/tradeable
plz guide
Thnaks a lt Shai today i have almost earned my 6 months salary from BN today great
Clearing Negative Self Beliefs:
If you are going to become a successful and profitable trader – in addition to developing the skills and mindset of trading, you are going to need to believe that you can succeed. Many of us wreck our own chances of success because of old, outdated beliefs that are still stuck in our subconscious – that sap our confidence. Of course all the positive thinking in the world is not going to help you if you don’t have a trading method with a positive expectancy, and the ability to trade it consistently. But no method will give you profitable trades all the
time. There will be days, weeks, or even months where you struggle to break even. The question is, when your method experiences a natural draw down due to market conditions, do you take it personally? Do you start to undermine your ability to stay in the opportunity flow by beating yourself up? Can you distinguish between the kind of tough self talk that helps you to stay motivated, and the self talk that destroys your
chances of success?
When I starts loosing continuous these lines gives me some strength.
@Powertrade Congrats Man :)
THANKS GUGGU ITS JUST THE GUIDANCE SHAI LEST I CAN'T HAVE THAT MUCH CONFIDENCE IN TRADE
Manu,
I don't think the retail debt market is developed enough for trading opportunities.If you are looking to take advantage of rising interest rates, then mutual funds would be a better option.
Power trade,
Congrats !
But bear in mind, that it was still a high risk trade.I would advise against betting on news flow with large lot sizes.
Anyways, Cheers :) .
Guggu,
Good One !
Hang in there. Markets will always open the next day and we will get better opportunities.
thanks shai for advise i would make it a point to trade in less qty during such times.....
Ya Shai! My margin money is gone in these two - three days trade, so little disturbance is natural.
Will see you next day, with some more +energy.
Bye!
Bye shai and other warriors thanks to all
Bye Shai & friends!
Bye Shai and friends!
One more of those down-up-down days and eventually close out flat.
I shouldn't be expecting much anyway because of the monster 5500CE OI!
But good discussions happened today on interest rates ...
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