January Series Outlook | Stocks and Commodities

December 25, 2014
Time: 9.15 pm

January Series Outlook:

1. FIIs continuously bought for first 11 months of 2014 and booked some profit in December 2014.
2. FIIs have sold close to Rs 10000 crores in December series.
3. They have sold for the last 12 trading sessions.
4. Once Nifty broke 8000 on December 17, LIC stepped in and bought for huge amount in Banking sector stocks.
5. Then markets recovered and again fell close to the expiry.
6. But there was a divergence in the performance of Nifty and Bank Nifty.
7. On November expiry, Nifty expired at 8494 and on December expiry it expired at 8174, down by 320 points.
8. But Bank Nifty expired at 18022 on November expiry and at 18535 on December expiry, up by more than 500 points.
9. If Banking stocks did not rise then the fall in Nifty would have been more severe and Nifty would have broken 7800 easily.
10. It is the out performance of Banking stocks which stopped Nifty falling drastically.
11. So the same thing is likely to continue in January series.
12. On Jan 3, PM Modi is meeting bankers along with RBI Chairman Raghuram Rajan.
13. This will boost the sentiment in banking stocks and they will continue to do well.
14. Oil prices continued to fall and hence energy sector is likely to under perform.
15. IT and Metal sectors have been under performing.
16. So only promising sector is Banking sector.
17. Risk averse investors can go long in Bank Nifty and short in Nifty.
18. RBI policy meet in the first week of Feb. will keep banking stocks higher closer to January expiry.
19. January is a 5 week month.
20. Also corporate results will make this month highly volatile.
21. Also FIIs allocation to India will be clear by second or third week of January.
22. Infosys will start the results season on January 9.
23. Inflation and IIP data in the second week of January will be watched keenly as these data will influence the RBI decision.
24. HSBC Manufacturing and Services PMI data in the first week of January will add to the sentiment.
25. India VIX is at 15 which shows reasonable volatility in January.
26. Nifty is expected to trade between 7800 and 8600, a range of 800 points.
27. One can consider selling Nifty 7700 put option and 8700 Call option.
28. This gives a return of about 9% for the span margin paid and this is an excellent return considering the lower risk.