Sail - Bull Call Spread Update

Sail is now running in a profit of 9500 rupees.  Book partial profit at current level.

Nifty Weekly Analysis for the week ending 27 October 2017

Sensex opened the week at 32412, made a high of 33287, low of 32313 and closed the week at 33157. Thus it closed the week with a gain of 767 points (2.4%). At the same time the Nifty opened the week at 10177, made a high of 10366, low of 10125 and closed the week at 10323. Thus the Nifty closed the week with a gain of 177 points(1.74%).

Last week we have discussed “…On daily chart, Sensex made engulfing bearish candle.  So breaking Thursday’s low validate further bearish possibilities…...Both Sensex and Nifty near daily  channel line support. So protecting Thursday’s low is important for bulls to further upmove. “

Let us discuss few observations on last week Indian benchmark movements. 

1. Indices took its channel line support and made a bullish harami patter on the first day of the week itself.  At the same time Sensex made a bullish piercing pattern formation.   On Wednesday both Sensex and Nifty made a gap cap candle and closed above previous record high. Now Sensex and Nifty trading near its channel line resistance.    
2. Last week we have observed that Sensex not closed above its previous high.   But on this week Sensex made a fresh life time high and closed well above its previous closing of 32686 and outperformed Nifty as well.
3. In my post dated 14^th October, we have discussed “If Sensex close above its record high expecting a medium term target of 33000 – 34000.  Same time Nifty target for medium term is 10300-10600 level.   Both Sensex and Nifty achieved its first target.. 
4. On Weekly Chart, Nifty made 4 consecutive weekly candles.  The benchmark Sensex posted its biggest weekly advance since March 2017.
5. On daily chart, Indian Benchmark made 5 consecutive higher high candle.
6. The rollover rate in the Nifty October futures, which expired Thursday, was 73 per cent, compared with a three-month average of 65 per cent on expiry.
7. Last week, we observed a negative divergence between Nifty index and Bank Nifty index. This week, the government's recapitalisation plan pushed the Bank Nifty higher and closed the week with 3.46% gain.  Unfortunately, the index failed to make a new life high. This is mainly  because of the under-performance of Private Banks.  .  After hitting 9 months low, PSU bank retraced its 5 months correction in a faster time and closed above its all-time high. 
8. Nifty P/E level reached 26.73 on Thursday.  All-time high of Nifty P/E is 28.47 in 2000.
9. Global financial markets : Global Markets ended the week on a positive note. 
10. Last week we have discussed about outflow of FIIS in Indian Market.  PSU recapitalisation reduced the selloff.  The net outflow for the month below US$1 billion (lowest outflow since August).  On Wednesday, FII buying was more than Rs 3500 crores, highest since last 7 months.   On Weekly basis,  FII were buyers in the cash segment. 
11. Options data for November series indicate highest Call Open Interest is at the strike of 10500 whereas the highest Put build-up is at 10000. Thus Options data suggests a trading range with resistance coming at 10500 & support at 10000 

Sail - Bull Call Spread

After 8 months correction phase, SAIL made a bullish break out with good volume. 

Buy 80 Call at 4.7
Sell 90 Call at 2

Risk Reward Ratio is 1:2

Maximum Loss : 18,000
Maximum Profit :42,000

Nifty Weekly Analysis for the week ending 19 October 2017

Sensex opened the week at 32488, made a high of 32700, low of 32319 and closed the week at 32390. Thus it closed the week with a loss of 43 points (-0.13%). At the same time the Nifty opened the week at 10207, made a high of 10252, low of 10123 and closed the week at 10147. Thus the Nifty closed the week with a loss of 21 points (-0.21%).   Market hits all time record high in this week.

Last week we have discussed “…..Inter-market divergence: When Nifty made a new all time high, Sensex not repeated the same thing.  Remember the fall and retracement of last time; Nifty fell 452 points in 7 days from 2nd Aug to 11th Aug and retraced the rally and made new high on 19th September.  But the same was not happened in the Sensex.  Nifty  lost all the gain and fell 491 points.   So to confirm the bullish breakout, Sensex also should close with new record high.  If Sensex close above its record high expecting a medium term target of 33000 – 34000.  Same time Nifty target for medium term is 10300-10600 level.”

Let us discuss few observations on last week Indian benchmark movements. 

1. Nifty closed well above previous high, at the same time Sensex also broke the high but not able to close above previous high of 32686.  Sector wise  Banking, Auto, Infra, consumer goods, FMGC
2. Markets made a weekly bearish candle after two consecutive weekly bullish candle.
3. On daily chart, Sensex made engulfing bearish candle.  So breaking Thursday’s low validate further bearish possibilities.
4. On daily chart, Sensex and Nifty made two consecutive lower high, lower low candle. In this uptrend from 28 September, this is the first time Indices making two consecutive lower low, lower high formations.  
5. Both Sensex and Nifty near daily  channel line support. So protecting Thrusday’s low is important for bulls to further upmove.
6. Nifty P/E level reached 26.55 on Monday for the first time in this trend from Dec 2016 onwards.  All time high of Nifty P/E is 28.47 in 2000. Nifty made a 491 point correction after hitting P/E ratio at 26.42 on 18 Sep 17. 
7. Bank Nifty has shown clear negative divergence against Nifty.  Bank Nifty retraced only 85% of the fall.  At the same time Nifty retraced 115%.   Bank Nifty made a fall of 993 points in 3 days.  78% of upmove is retraced in 3 days.  Nifty PSU Bank index hits fresh 9-month low
8. On daily chart Stochastic in overbought zone and made a bearish cross-over.  On weekly chart RSI is showing negative divergence.
9. Global financial markets : Global Markets ended the week on a positive note. 
10. On Weekly basis,  FII were sellers in the cash segment.  US Market attract largest inflows in 18 weeks.  But Indian Markets FIIs outflow continues.
11. Options data for October series indicate highest Call Open Interest is at the strike of 10200 whereas the highest Put build-up has shifted higher at 10000.  There is a huge unwinding seen at the strike of 10200 put and huge addition of Call Open Interest seen at the strike of 10200, suggests 10200 is a strong resistance and a correction until 10000 level.  

Hindalco - Bull Call Spread Target 2 achieved

Hindalco Bull Call Spread is now at a profit of 17500 rupees.  Book full profit.

Nifty Weekly Analysis for the week ending 13 October 2017

Sensex opened the week at 31862, made a high of 32509, low of 31769 and closed the week at 32433. Thus it closed the week with a gain of 618 points (1.91%). At the same time the Nifty opened the week at 9988, made a high of 10192, low of 9956 and closed the week at an all-time  record high of  10167, surpassing its Sept. 18 record. Thus the Nifty closed the week with a gain of 188 points (1.85%).  Markets register their consecutive 2nd weekly gain. 

Last week we have discussed “…..Market should close above  Friday’s high and surpassing 66% retracement level is important for market for further upmove.”  Market closed above Friday’s high on 1st day of the week itself and on Thursday both Sensex and Nifty closed well above the 66% retracement level. 

Let us discuss few observations on last week Indian benchmark movements.

1. Against 7 days fall of 1442 points  Sensex retraced almost 100% (1426 points) in 10 days time.  At the same time Nifty retraced more than 100% and made a new high.
2. In August, retracement from 9685 to 10179 took 25 days.   But on the current retracement from 9688 to 10192 took only 10 days.  On weekly chart, 2 weeks fall fully retraced in 2 weeks time which indicate more bullishness of the market.
3. On daily chart, both Sensex and Nifty made higher high candle through out the rally which also indicate the strength of the market.
4. On daily chart MACD made a bullish cross-over, weekly also to do the same.
5. Inter-market divergence: When Nifty made a new all time high, Sensex not repeated the same thing.  Remember the fall and retracement of last time; Nifty fell 452 points in 7 days from 2nd Aug to 11th Aug and retraced the rally and made new high on 19th September.  But the same was not happened in the Sensex.  Nifty  lost all the gain and fell 491 points.   So to confirm the bullish breakout, Sensex also should close with new record high.  
6. If Sensex close above its record high expecting a medium term target of 33000 – 34000.  Same time Nifty target for medium term is 10300-10600 level.
7. Global financial markets : Global Markets ended the week on a positive note.  
8. On Weekly basis,  FII were sellers in the cash segment
9. Options data for October series indicate highest Call Open Interest is at the strike of 10200 whereas the highest Put build-up has shifted higher at 9900.  There is a huge addition of Put Open Interest is at the strike of 10100.  Shifting of put build-up & huge addition on 10100 put strike suggests more bullishness in the Market. 

TCS Bullish Breakout

TCS made a bullish breakout after 2 month long correction.   Buy TCS above 2562 with stoploss of
2455.

Hindalco - Bull Call Spread - Update

Reference to my Hindalco trade recommendation on 7th October.

Bull Call Spread is now at the profit of 9600 rupees.

Book the partial profit.

Hindalco - Bull Call Spread

Hindalco took support on 25th September at the low of 223.3.  On that day Hindalco closed below 50 ema and on next day it closed above 50 d ema.  Stock is retraced 90% of fall with a break out candle with volume on Friday.  Daily MACD ready for a bullish cross-over.

In this scenario advise to take a bull call spread on this stock:

Buy 255 call at 5.45
Sell 265 call at 2.2

Maximum Risk for this trade is 11375 Rupees.
Maximum Profit potential for this trade is : 23625 Rupees.

Risk Reward Ratio : 1:2

Nifty Weekly Analysis for the week ending 06 October 2017

Sensex opened the week at 31537, made a high of 31844, low of 31440 and closed the week at 31814. Thus it closed the week with a gain of 530 points (1.67%). At the same time the Nifty opened the week at 9893, made a high of 9989, low of 9831 and closed the week at 9979. Thus the Nifty closed the week with a gain of 191 points (1.91%).  Markets register their first weekly gain in the past three weeks. 

1. Last week we have discussed “…..For the coming week, protecting Thursdays low and close above 50 day moving average is crucial for bulls to achieve the momentum…”.   Nifty protected Thursday’s low and retraced 61% of entire fall.
         
2. Same as last week Let us compare July-August Rally & its retracement with  August-September rally and its retracement and its pull back in October.  After Sensex hit all-time high of 32686.5, it made a fall of 1558.5 points in 7 days.  Sensex gained a 809 points in 3 days time.  On the current retracement Sensex took 5 days and could achieve only 762 points.  At the same time Nifty gained 263 points in 5 days time in earlier retracement and in present retracement Nifty achieved 301 points.  So when Sensex performed almost same as last time Nifty outperformed Sensex.  Bank Nifty move up also slower compared to last retracement.  So Inter-market divergence is still exists.
3. Sensex made a weekly bullish harami candle.  Nifty has shown more strength than Sensex; broke previous week high of 9960 and made a bullish weekly candle.  Bank Nifty made a weekly bullish harami cross candle.
4. On Daily chart, Both Sensex and Nifty made 5 consecutive higher high, higher low daily candle pattern which is not happened during previous retracement, is signalling bullishness of the market.
5. Nifty closed well above all important moving averages.   Sensex should follow the same for confirmation.
6. Market should close above  Friday’s high and surpassing 66% retracement level is important for market for further upmove.
7. Global financial markets : The US markets were up 1.8% for the week. European markets ended the week in the green. Most of the Asian Market ended on positive note.
8. On Weekly basis,  FII were sellers in the cash segment
9. Options data for October series indicate highest Call Open Interest is at the strike of 10000 whereas the highest Put build-up has shifted higher at 9800. Thus Options data suggests a trading range with resistance coming at 10000 & support at 9800.  There is a huge addition of Put Open Interest is at the strike of 9900 indicate more bullishness of the Market.