Dalal Street Week Ahead | Stocks and Commodities

March 20, 2016
Time: 10 pm

Dalal Street Week Ahead:

1. Last week markets were highly volatile.
2. Though markets were highly volatile, Nifty was trading between 7400 and 7600.
3. Nifty gained about 100 points in the last one week.
4. Finally Nifty managed to break 7600 towards the end of the week.
5. Since US markets closed higher on Friday, Nifty is likely to open higher on Monday.
6. Since all the important data are out, markets will be left for F&O traders.
7. We have only three days of trading in the coming week and 4 days in the expiry week.
8. So time value will be in favour of option sellers.
9. There are no key economic data this week.
10. Highest open interest among Puts is at 7400.
11. Highest open interest among Calls is at 7700.
12. Hence Nifty is likely to trade between 7400 and 7700.
13. Markets may be volatile as people may not create positions ahead of 4 days of weekend.
14. Volume is expected to go down and that may add to volatility.
15. Banking and other rate sensitive stocks will be in focus as Govt. has cut interest rates of PPF, NSC, Indra Vikas Patra, etc.
16. This is an indication for lower rates, RBI is almost sure to cut rates in April.
17. Bank Nifty is likely to test 16000 by the end of this expiry.
18. Sell Nifty 7400 Put and 7800 Call on Monday.
19. Since there are only 7 more trading sessions, option premiums will fall as the time goes.
20. Sell Bank Nifty 15000 Put and 16500 Call on Monday.
21. Bank Nifty will face resistance at 16000 and will find support at 15000.
22. Both these strategies will give more than 5% return in two weeks.