BEL made a reverse head and shoulder pattern. Buy the stock above 179.5
Sunday, 30 July 2017
Reliance Capital
On Weekly and Daily Chart, the stock made a bullish break out with huge volume. On monthly chart stock made a rounding bottom pattern.
Buy the stock above 721 level
Buy the stock above 721 level
JSW Energy - Bulllish Breakout
JSW Energy was in a down trend last for 2 years. Now stock made a break out above down trending channel with a good volume.
Buy the stock above 72.6.
Buy the stock above 72.6.
ESCORTS - Bullish Breakout
After two months down trend Escorts made a bullish breakout with good volume. Daily RSI and Stochastic Oscillator supporting the move. Weekly stochastic made a bullish crossover.
Buy the stock above 696 level.
Buy the stock above 696 level.
Saturday, 29 July 2017
Nifty Weekly Analysis for the week ending 28 July 2017
Nifty opened the week at 9936.8, made a high of 10114.8, low of 9919.6 and closed the week at 10014.5 with a gain of 99.25 points 0.99%). Nifty closed above five figure milestone for the first time
Options data for July series indicate highest Call Open Interest is at the strike of 10100 /10200 and highest Put build-up is at 9800. Last expiry highest call built up at 10000 and put built up was at 9800 level. Now that call built up shifted to 10100/10200 level. It is noted that huge open interest added to 10400 / 10500 call strikes.
Global Indices : Most of the major benchmarks ended the week modestly lower, although the Dow Jones Industrial Average recorded a decent gain
FIIs and DIIs are net buyers in cash market.
We have discussed in the post dated 3rd June “In the earlier rally from March 2016, on first 5 months Nifty made 1813 points and on the current rally from December 2016, Nifty made 1727 points, short of 85 points. So it is almost achieved price wise. Earlier rally from March 2016 long for 6 months. So if it achieve price wise compared to earlier rally Nifty will reach in a price target of 10037 level.” Nifty achieved the target price wise and time wise as well.
Last week I have said “Nifty should close above 9928.2 for further upmove, otherwise the present moves seems to be like a double top pattern.” Nifty made a gap up opening above the said level and made a highest closing on first day of the week itself which confirmed further upmove. Higher highs continued throughout the week and Nifty made a high of 10114.85 on Thursday and made a bearish closing. Action formed a counter attack bear candle. Friday Index made a gap down action and made a lower low closing.
Nifty has touched higher end of trend channel and should rebound from there. Nifty would see reversal and enter into negative zone once it closes below Friday low. Oscillators are showing negative divergence in daily chart.
Options data for July series indicate highest Call Open Interest is at the strike of 10100 /10200 and highest Put build-up is at 9800. Last expiry highest call built up at 10000 and put built up was at 9800 level. Now that call built up shifted to 10100/10200 level. It is noted that huge open interest added to 10400 / 10500 call strikes.
Global Indices : Most of the major benchmarks ended the week modestly lower, although the Dow Jones Industrial Average recorded a decent gain
FIIs and DIIs are net buyers in cash market.
We have discussed in the post dated 3rd June “In the earlier rally from March 2016, on first 5 months Nifty made 1813 points and on the current rally from December 2016, Nifty made 1727 points, short of 85 points. So it is almost achieved price wise. Earlier rally from March 2016 long for 6 months. So if it achieve price wise compared to earlier rally Nifty will reach in a price target of 10037 level.” Nifty achieved the target price wise and time wise as well.
Last week I have said “Nifty should close above 9928.2 for further upmove, otherwise the present moves seems to be like a double top pattern.” Nifty made a gap up opening above the said level and made a highest closing on first day of the week itself which confirmed further upmove. Higher highs continued throughout the week and Nifty made a high of 10114.85 on Thursday and made a bearish closing. Action formed a counter attack bear candle. Friday Index made a gap down action and made a lower low closing.
Nifty has touched higher end of trend channel and should rebound from there. Nifty would see reversal and enter into negative zone once it closes below Friday low. Oscillators are showing negative divergence in daily chart.
Tuesday, 25 July 2017
Dividend Capture with Derivative hedging.
There are few less risk / zero risk strategies in the share market. Dividend Capture Strategies are one of them.
There are plenty of companies that pay dividend yields that are much higher than what you can get on completely risk-free investments. But, how to control the downside risk of price movement?. The challenge is to close out your position with a profit that is worth the risk. Typically the stock will drop by about the dividend amount when it starts trading on the ex-dividend day, but if the stock has a generally up day your overall profit can be better than the dividend. You lose money if the stock drops by more than the dividend amount.
By taking the future contract in the opposite position of the stock in the same ratio can avoid the risk of downside movement of stock.
We are now on a company financial result period. Let us look at Ceat Ltd. Ceat Ltd. Ex-dividend date is at 28 Jul.
Buy Ceat stock at 1874 – quantity equal to one lot Future contract. In this case 700 ea.
Sell Ceat Future at 1872. In this case your maxim risk is 1400 rupees which is price difference between spot and future.
Capital required for this trade is :
Stock : 1874 x 700 = 13,11800
Future Margin approx.. 98,000
Total : 14,09800 Rupee
Ceat announced Dividend 11.5 rupee per share.
Total dividend to receive : 11.5 x 700 = 8050 Rupee
Expense on hedging with future : 1400 Rupee
Maximum profit on this trade : 6650 rupee which is 0.5% of Capital Investment.
Percentage return is not much attractive. But the advantages are : zero risk & dividends are tax free !
There are plenty of companies that pay dividend yields that are much higher than what you can get on completely risk-free investments. But, how to control the downside risk of price movement?. The challenge is to close out your position with a profit that is worth the risk. Typically the stock will drop by about the dividend amount when it starts trading on the ex-dividend day, but if the stock has a generally up day your overall profit can be better than the dividend. You lose money if the stock drops by more than the dividend amount.
By taking the future contract in the opposite position of the stock in the same ratio can avoid the risk of downside movement of stock.
We are now on a company financial result period. Let us look at Ceat Ltd. Ceat Ltd. Ex-dividend date is at 28 Jul.
Buy Ceat stock at 1874 – quantity equal to one lot Future contract. In this case 700 ea.
Sell Ceat Future at 1872. In this case your maxim risk is 1400 rupees which is price difference between spot and future.
Capital required for this trade is :
Stock : 1874 x 700 = 13,11800
Future Margin approx.. 98,000
Total : 14,09800 Rupee
Ceat announced Dividend 11.5 rupee per share.
Total dividend to receive : 11.5 x 700 = 8050 Rupee
Expense on hedging with future : 1400 Rupee
Maximum profit on this trade : 6650 rupee which is 0.5% of Capital Investment.
Percentage return is not much attractive. But the advantages are : zero risk & dividends are tax free !
Sunday, 23 July 2017
Nifty Weekly Analysis for the week ending 21 July 2017
Major News of the week:
Nifty opened the week at 9908.15, made a high of 9928.2, low of 9792.05 and closed the week at 9915.25 with a gain of 29 points 0.29%). Nifty closed above the previous week high of 9913.3.
Options data for July series indicate highest Call Open Interest is at the strike of 10000 and highest Put build-up has shifted upwards and is at 9800. Last week highest put built up was at 9600/9700 level. Now that shifted to 9800 level and 9900ce unwinded which indicate bullishness of the market.
Global Indices : European stocks headed lower this week. S&P 500 and MSCI World among record-setters. Almost all US market end flat to positive note.
FIIs bought shares worth Rs 1,956.51 crore during the week, as per Sebi's record including the provisional figure of July 21.
Last week we discussed “Looking to the past nifty movement since December 2016, after a 400-500 points upmove usually there could be a correction around 200 points. Daily Oscillators are now in overbought sold. Nifty nearing Trendline channel resistance.”. Nifty hit all time high of 9928.2 on Monday itself and then made a correction of 135 points and hit a low 9792.05 on 18 July.
Nifty made a new high and managed to close above 9900 mark on first day of the week. On the next day Nifty opened gap down and traded red throughout the day and filled gap made on last Thursday,13 July.. Index made first lower low after 11 days. On Wednesday, Nifty managed to hold Tuesday’s low and closed above Tuesday’s high. On Thursday Index made a dark cloud cover bear candle. On Friday Nifty protected DCC low and made a bullish hammer and managed to close above 9900 level on Nifty. Protecting Friday’s low is important for gaining strength for bulls.
In this upmove Nifty / Sensex made three gap ups on daily chart. 1st on 3rd July, 2nd on 10th July and 3rd gap up on 13th Jul. There are three types of gaps : Breakaway gaps, runaway gaps & exhaustion gap. Break-away gap usually occurs at completion of important price pattern and usually signal the beginning of significant market move. So we can consider 3rd July gap as a breakaway gap. 2nd type of gap is runaway gap which indicate the strength of the market. 10th July gap is comes under 2nd type of gap. Final type of gap (exhaustion gap) appears near the end of market move. To qualify exhaustion gap, directional move quickly fades and price turn lower within a couple of days on within a week. When price close under the last gap, then exhaustion gap is confirmed. So to qualify 13th Jul gap as exhaustion gap price should come down and close below the gap. In this case it should close below 9816.1 – 12th Jul close price. Nifty filled the gap, but not closed below it.
Nifty should close above 9928.2 for further upmove, otherwise the present moves seems to be like a double top pattern. Close below 9792 confirms Double Bottom.
- Reliance announcement about Reliance Jio Phone
- Reliance announcement of 1:1 bonus issue of shares
- China’s Second Quarter GDP beats forecasts.
Nifty opened the week at 9908.15, made a high of 9928.2, low of 9792.05 and closed the week at 9915.25 with a gain of 29 points 0.29%). Nifty closed above the previous week high of 9913.3.
Options data for July series indicate highest Call Open Interest is at the strike of 10000 and highest Put build-up has shifted upwards and is at 9800. Last week highest put built up was at 9600/9700 level. Now that shifted to 9800 level and 9900ce unwinded which indicate bullishness of the market.
Global Indices : European stocks headed lower this week. S&P 500 and MSCI World among record-setters. Almost all US market end flat to positive note.
FIIs bought shares worth Rs 1,956.51 crore during the week, as per Sebi's record including the provisional figure of July 21.
Last week we discussed “Looking to the past nifty movement since December 2016, after a 400-500 points upmove usually there could be a correction around 200 points. Daily Oscillators are now in overbought sold. Nifty nearing Trendline channel resistance.”. Nifty hit all time high of 9928.2 on Monday itself and then made a correction of 135 points and hit a low 9792.05 on 18 July.
Nifty made a new high and managed to close above 9900 mark on first day of the week. On the next day Nifty opened gap down and traded red throughout the day and filled gap made on last Thursday,13 July.. Index made first lower low after 11 days. On Wednesday, Nifty managed to hold Tuesday’s low and closed above Tuesday’s high. On Thursday Index made a dark cloud cover bear candle. On Friday Nifty protected DCC low and made a bullish hammer and managed to close above 9900 level on Nifty. Protecting Friday’s low is important for gaining strength for bulls.
In this upmove Nifty / Sensex made three gap ups on daily chart. 1st on 3rd July, 2nd on 10th July and 3rd gap up on 13th Jul. There are three types of gaps : Breakaway gaps, runaway gaps & exhaustion gap. Break-away gap usually occurs at completion of important price pattern and usually signal the beginning of significant market move. So we can consider 3rd July gap as a breakaway gap. 2nd type of gap is runaway gap which indicate the strength of the market. 10th July gap is comes under 2nd type of gap. Final type of gap (exhaustion gap) appears near the end of market move. To qualify exhaustion gap, directional move quickly fades and price turn lower within a couple of days on within a week. When price close under the last gap, then exhaustion gap is confirmed. So to qualify 13th Jul gap as exhaustion gap price should come down and close below the gap. In this case it should close below 9816.1 – 12th Jul close price. Nifty filled the gap, but not closed below it.
Nifty should close above 9928.2 for further upmove, otherwise the present moves seems to be like a double top pattern. Close below 9792 confirms Double Bottom.
Friday, 21 July 2017
Thursday, 20 July 2017
Engineers India - Derivative Trading Strategy
Buy future at 165.1
Buy 165 Put option at 2.85
Buy 170 Call option at 2.9
Maximum Risk 175 rupees
Maximum Profit 17,325 rupees.
Buy 165 Put option at 2.85
Buy 170 Call option at 2.9
Maximum Risk 175 rupees
Maximum Profit 17,325 rupees.
Engineers India - Bullish Breakout
Engineers India made a break out today with good volume. Stock is made a double bottom on 13th June and 30th June. Huge open interest addition seen in this stock. Double bottom target for the above stock is 170-175 levels.
Friday, 14 July 2017
Nifty Weekly Analysis for the week ending 14 July 2017
Major News of the week:
Nifty opened the week at 9719.3, made a high of 9913.3, low of 9646.45 and closed the week at 9886.35 with a gain of 221 points 2.23%). Nifty closed well above the previous swing high of 9709.3. Since made biggest weekly candle since March 2017
Options data for July series indicate highest Call Open Interest is at the strike of 9900/10000 and highest Put build-up has shifted upwards and is at 9700/9600.
Global Indices : The Dow and S&P 500 hit record highs on Friday after weak economic data dulled prospects of more interest rate hikes this year
Last week we discussed “Also the highest open interest built up in 9,700 strike, which means that this level will offer a strong resistance and unwinding of 9700CE OI, can lead more bullish move with a target of 9800 to 9900 level”. Huge unwinding was seen at 9700ce and higher OI shifted to 10000CE. On Fridy nifty reached our target level of 9900 level.
Nifty made a 53 point gap-up opening above the previous record high on first day of the week. Action made a Bullish Hammer type candle. Nifty made higher high through out the week. On Friday, Nifty witnessed minor profit booking and made a bear candle with long shadow in the bottom.
In April Nifty made a correction of 198 point fall and retraced fully and raised 457 points. Similarly Nifty corrected 261 points and retraced fully and raised 465 points. It take 18 days for fall and 6 days to retrace fully. Faster retracement means the correction is the part of the uptrend and showing overall bullishness of the market. Huge Open Interest added to 9900 PE option, as a contrarian, which indicate bullishness of the market.
Looking to the past nifty movement since December 2016, after a 400-500 points upmove usually there could be a correction around 200 points. Daily Oscillators are now in overbought sold. Nifty nearing Trendline channel resistance.
In the coming week, the 9,700 level should act as good support. Highest open interest cumulated at 9700 and 9600 level. All the previous correction made a correction near 200 points. In that case a correction of 200 points which is in the region of 9700 level. 9700 level was previous swing high and was a strong resistance. Now previous resistance become support. 10000 level could act as a good resistance. I have mentioned in my post dated 3rd June “In the earlier rally from March 2016, on first 5 months Nifty made 1813 points and on the current rally from December 2016, Nifty made 1727 points, short of 85 points. So it is almost achieved price wise. Earlier rally from March 2016 long for 6 months. So if it achieve price wise compared to earlier rally Nifty will reach in a price target of 10037 level.”
- Sebi restricts use of P-Note derivatives
- Technical glitch hits trading at National Stock Exchange
- TCS / Infosys quarterly result
Nifty opened the week at 9719.3, made a high of 9913.3, low of 9646.45 and closed the week at 9886.35 with a gain of 221 points 2.23%). Nifty closed well above the previous swing high of 9709.3. Since made biggest weekly candle since March 2017
Options data for July series indicate highest Call Open Interest is at the strike of 9900/10000 and highest Put build-up has shifted upwards and is at 9700/9600.
Global Indices : The Dow and S&P 500 hit record highs on Friday after weak economic data dulled prospects of more interest rate hikes this year
Last week we discussed “Also the highest open interest built up in 9,700 strike, which means that this level will offer a strong resistance and unwinding of 9700CE OI, can lead more bullish move with a target of 9800 to 9900 level”. Huge unwinding was seen at 9700ce and higher OI shifted to 10000CE. On Fridy nifty reached our target level of 9900 level.
Nifty made a 53 point gap-up opening above the previous record high on first day of the week. Action made a Bullish Hammer type candle. Nifty made higher high through out the week. On Friday, Nifty witnessed minor profit booking and made a bear candle with long shadow in the bottom.
In April Nifty made a correction of 198 point fall and retraced fully and raised 457 points. Similarly Nifty corrected 261 points and retraced fully and raised 465 points. It take 18 days for fall and 6 days to retrace fully. Faster retracement means the correction is the part of the uptrend and showing overall bullishness of the market. Huge Open Interest added to 9900 PE option, as a contrarian, which indicate bullishness of the market.
Looking to the past nifty movement since December 2016, after a 400-500 points upmove usually there could be a correction around 200 points. Daily Oscillators are now in overbought sold. Nifty nearing Trendline channel resistance.
In the coming week, the 9,700 level should act as good support. Highest open interest cumulated at 9700 and 9600 level. All the previous correction made a correction near 200 points. In that case a correction of 200 points which is in the region of 9700 level. 9700 level was previous swing high and was a strong resistance. Now previous resistance become support. 10000 level could act as a good resistance. I have mentioned in my post dated 3rd June “In the earlier rally from March 2016, on first 5 months Nifty made 1813 points and on the current rally from December 2016, Nifty made 1727 points, short of 85 points. So it is almost achieved price wise. Earlier rally from March 2016 long for 6 months. So if it achieve price wise compared to earlier rally Nifty will reach in a price target of 10037 level.”
Monday, 10 July 2017
Saturday, 8 July 2017
Nifty Weekly Analysis for the week ending 07 July 2017
Nifty opened the week at 9587.95, made a high of 9700.7,
low of 9543.55 and closed the week at 9665.8with a gain of 145 points 1.5%). Nifty made a highest closing above previous
3 weeks closing.
Options data for July series indicate highest Call
Open Interest is at the strike of 9700 and highest Put build-up has shifted
upwards and is at 9500.
FIIS were net sellers in Indian Market and DIIS were
net buyers.
Global Indices
ended on a mixed note.
Nifty made a gap-up opening on first day of the week ,
made hammer type candle, closed above previous 5 days closing and closed above
20 day moving average with the gain of 94 points. Nifty broke down-trending channel. On Tuesday Nifty made a counter attack bear
candle after two days bull candle. Bulls
managed to protect Counter attach bear on Wednesday. On Wednesday Nifty traded in narrow range and
made a Harami Candle suggesting an indecisive action. On Thursday
Nifty made a highest closing after 21 days after the all-time high of 9709.3 on
6th June. Action formed a
bull candle with a larger upper shadow indicating selling at the higher
levels. On Friday, Nifty made a lower
opening and made doji inside the previous day indicating indecision.
Last week we discussed a series of symptoms of weakness
of the market. But the confirmation was not happened. I have mentioned in my last week post “By looking at the OI data and daily Oscillator,
market will be range bound to positive in the coming days. So a major fall is not expected in coming
week. Protecting Friday's low of 9448.75
is crucial for bulls for further upmove”.
Nifty protected Friday low, started to make higher high in daily time
frame, managed to close above 20 day moving average. Nifty made 252 points against 261 points down
move, retraced almost 100%.
Resistance for Nifty lies in the zone of 9700 to 9750 where the
index has formed a double top pattern. Also
the highest open interest built up in 9,700 strike, which means that this level
will offer a strong resistance and unwinding of 9700CE OI, can lead more
bullish move with a target of 9800 to 9900 level.
Wednesday, 5 July 2017
Ashok Leyland - Bull Call Spread Update
Ashok Leyland trade is in a profit of 5800 rupees. Take partial profit at the current level : Close 100 call at 4.25 and close 105 call at 2.05
Monday, 3 July 2017
ITC - Long Ratio Trade
ITC made new high today with a gap up opening. Volume is good.
Buy ITC Future at 343.6
Buy 345 Put option at 9.65
Sell 355 Call Option at 4.95
Sell 365 Call Option at 2.7
Maximum Profit is 22,560
Lower breakeven 341.2 (Below 341.2, maximum loss of 1440 rupees)
Upper breakeven 374.4 (Above 374.4 unlimited loss)
Span Margin required for this trade is 1,19,000 Rupees.
Buy ITC Future at 343.6
Buy 345 Put option at 9.65
Sell 355 Call Option at 4.95
Sell 365 Call Option at 2.7
Maximum Profit is 22,560
Lower breakeven 341.2 (Below 341.2, maximum loss of 1440 rupees)
Upper breakeven 374.4 (Above 374.4 unlimited loss)
Span Margin required for this trade is 1,19,000 Rupees.
Sunday, 2 July 2017
Ashok Leyland - Bull Call Spread
Today Ashok Leyland made a break out above last three weeks high with good volume. Also it surpassed high of Feb 2017.
Buy 100 Call Option at 2.65
Sell 105 Call Option at 1.25
Maximum Risk on this Trade is 9450
Maximum Profit on this Trade is 25550
Risk Reward Ratio is favourable which is 1:3.
Span Margin Requirement for this trade is 50,000
Buy 100 Call Option at 2.65
Sell 105 Call Option at 1.25
Maximum Risk on this Trade is 9450
Maximum Profit on this Trade is 25550
Risk Reward Ratio is favourable which is 1:3.
Span Margin Requirement for this trade is 50,000
Saturday, 1 July 2017
Nifty Weekly Analysis for the week ending 30 June 2017
On the Monthly Chart Nifty opened the month at 9603.55,
made a high of 9709.3, low of 9448.75 and closed the month at 9520.9. Thus made a monthly loss of 100 points (1%). Nifty / Sensex made a halt after 5
consecutive monthly bullish candle and made bearish candle for the first time
since December 2016.
Nifty opened the week at 9594.05, made a high of
9615.4, low of 9448.75 and closed the
week at 9520.9. Thus it closed the week
with a loss of 54 points (-0.57%). Nifty
made3 consecutive bearish candle for the first time since December 2016.
On Daily Chart, Nifty formed white body candle on
last day of the week, made a low of 9448.75 and managed to close above psychological 9500
mark.
Last week we discussed “Nifty now is in a crucial
Juncture for further upmove :. Nifty should close above 20 day moving average.
As two is the maximum number of weekly bearish candle, coming week is very
crucial for upside reversal. Nifty should
protect previous week low (9565.3) and retrace the previous two week candles in
fast”.
Nifty made a pull back on first day of the week, but
not able to sustain more than 5 minutes and not able to protect previous week
low (9565.3). Action formed the biggest
bear candle in 2017 and created a third weekly lower low for the first time
since December 2016. Nifty not able to
close above 20 day moving average.
Different from previous months Nifty didn’t move up
in the last week on month.
Weakness was shown in daily, weekly & monthly
chart as well. First time since
December 2016 Nifty made a bearish candle in monthly time frame.
In the last two corrections, market not fall more
than 200 points. In April 198 points and
in May 191 point correction. But this
time market made a 261 point correction for the first time since December 2016.
Fall is getting bigger in magnitude is
a sign of deceleration in upward momentum.
In the earlier rally, from the bottom of February 2016,
Nifty made 2143 points and made fall of
1075 points. 50% retracement on time
wise and pricewise. On the current rally from December 2016, Nifty made 1815
points, short of 327 points compared to previous up leg. Time wise current rally from December 2016
took more compared to previous upleg from February 2016. Rise is getting smaller is also a sign of
reduced upward momentum.
The entire upmove from February 2017 occurred in a
clear up trending channel. Nifty
breached the lower boundary of this uptrending channel.
There is a clear inter-sectorial divergence between
Nifty and Midcap / Small Cap Indices. Midcap
and smallcap indices made a 3% correction in May. But Nifty formed a new life time high in
June, but Midcap and smallcap indices failed to follow Nifty.
Daily Oscillators are turning up from oversold region. In the same time monthly and weekly
oscillators are turning down from overbought region.
Options data for July series indicate highest Call
Open Interest is at the strike of 9700 and highest Put build-up is at 9400. Compared
to 9700CE there are significantly more OI at 9400PE. OI as a contrarian Indication, highest put oi
suggest favourable for the market.
FIIS/DIIS Data:
FIIS were net sellers in Indian Market and DIIS were
net buyers.
Global Indices:
Almost all major Global Indices ended the week lower.
By looking at
the OI data and daily Oscillator, market will be range bound to positive in the
coming days. So a major fall is not
expected in coming week. Protecting Frday's low of 9448.75 is crucial for bulls for further upmove. Medium term average - 50 day ema at 9464. Next support seen near 9341 level which is previous swing low. Major support stand in region of 8950-9000
level. 38.2% Febo retracement at 9020
level. Previous swing high (swing from
April 2016 to September 2016) is 8969. Also there was gap up was formed after UP
election, in the range of 8975 to 9060.
Major uptrendline (connecting April 2016 low and 30 December 2016 low)
is around 8975 level.
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Indiamart Weekly Bullish Breakout
After 3 months of correction stock is made good set up to buy on monthly and weekly chart. Breakout with volume.
