Dalal Street Week Ahead, March 26, 2106 | Stocks and Commodities

March 26, 2106
Time: 1.30 pm

Dalal Street Week Ahead:

1. Last week Nifty added more than 100 points in the March rally.
2. The previous week also Nifty added about 100 points.
3. Last week I mentioned that Nifty was likely to trade between 7400 and 7700, but Nifty traded higher than 7700 and closed at 7716.
4. But my advise to sell 7400 Put and 7800 Call in Nifty and 15000 Put and 16500 Call in Bank Nifty have given handsome return.
5. These positions can be held until maturity this Thursday.
6. Coming week will be expiry week and markets are expected to be very volatile.
7. First positive news: (a) FIIs keep buying in Cash market, (b) This expiry coincides with year end closing of March 31 and hence mutual funds will like to show higher NAV as of 31st March and may not sell aggressively in the next few days, (c) RBI rate cut hope by the first week of April expiry will keep the bulls busy even during the expiry week.
8. There are some negatives also. (a) Dollar index is rising at fastest rate in the last one year, (b) Crude and other commodity prices are falling, (c) DIIs are selling aggressively, on Wednesday they have sold almost twice as much as FIIs have bought, (d) Global cues may not be good (e) Usually expiry will in favour of bears when markets rise in the first three to four weeks.
9. So market movement is very difficult to predict in the expiry week and we can expect two way movements.
10. On Wednesday evening, ADP Non Farm Payroll data from US is a key data to watch.
11. Some technical people are saying that Nifty will expire below 7500.
12. Nifty may expire anywhere between 7480 and 7820.
13. Nifty 7600 Put and 7800 Call have the highest open interest among Puts and Calls respectively.
14. Going by the options data, Nifty should expire between 7580 and 7820.
15. If there are no bad global cues, our markets will consolidate for few more days around 7700 and may break or break on the expiry day.
16. If there is no further rise in dollar index and fall in commodity prices, Nifty may try to scale 7800.
17. Bank Nifty holds the key. Bank Nifty will have to cross 16000 for Nifty to be bullish.
18. So there are some positive and some negative cues and hence markets are likely to be volatile within a range of 7500 to 7800.