Post Market Report, May 15, 2014 | Stocks and Commodities

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May 15, 2014
Time: 6.20 pm

Post Market Report:

1. Markets consolidated for third day.
2. India VIX shot up by 13.4%.
3. It shot up by more than 15% intraday.
4. But India VIX future is just up by 0.1%.
5. There is a difference of about 40% between spot and future.
6. There are only three trading sessions.
7. On an average VIX has to fall (or future should rise) by more than 13% everyday.
8. FIIs have bought for Rs 935 crores.
9. DIIs have sold for Rs 385 crores.
10. Tomorrow will be the D-Day.

Our View about Tomorrow's Market:

1. NDA victory is more or less priced in.
2. Markets will not fly high if NDA gets between 250 and 300 seats.
3. More than 5 to 8% move in Nifty is possible only if NDA gets more than 300 seats, which is unlikely.
4. Even if NDA performance is not good, they are likely to form government with the help of Patnaik, Jayalalitha, NCP and YSR Congress.
5. So even if NDA performance is not good, still markets are not likely to fall significantly.
6. Nifty can move a maximum of 400 to 500 points either side.
7. More likely on the higher side.
8. Markets will react drastically on the negative side only if NDA gets less than 200 seats.
9. Differences between 2009 and 2014:

(a) Everyone expected hung parliament in 2009 but stable govt. came. So that was the surprise. So Nifty            shot up. Now every one is expecting stable government, now if a stable govt. comes then it is not                  surprise.

(b) In 2009, the Nifty was way below all time high, Nifty fell from 6300 to 3700, so it shot up from 3700 to      4700 and that was reasonable. But now Nifty is already at all time high, so going up by 1000 points or          more is difficult now.

(c) In 2009, options were not famous. Now every one is playing with options instead of future or cash                market. So most positions are hedged now. So there will be no margin calls or scrambling to square up          positions.