Dalal Street Week Ahead | Stocks and Commodities

April 4, 2016
Time: 7.30

Dalal Street Week Ahead:

1. Last week, Nifty consolidated on a weekly basis.
2. Nifty was up just by 3 points compared to previous week close.
3. But this consolidation phase may not go for a long time.
4. After the RBI policy markets are likely to move in a big way on either side.
5. One simple reason for a breakout is the FII buying in Cash market.
6. In March alone FIIs have bought for more than Rs 27,000 crores.
7. If RBI cuts policy rates by 50 basis point, then Nifty is likely to test 8000 on the upside.
8. On Friday last week,US jobs data came as expected and US markets closed at 20166 high.
9. Dow is higher by more than 4% since the beginning of this year whereas we are down by more than 4% so far this year. 
10. So if FII buying continues like this it is just a matter of time Nifty will touch 8000.
11. On Monday, our markets will be reacting to US jobs data and manufacturing data.
12. Our markets will also react to Manufacturing PMI data.
13. On Tuesday, RBI policy will dominate the markets.
14. On Wednesday, FOMC meeting minutes will be released, people will be looking for clues of further rate hike.
15. On Thursday FOMC member Bullard will speak and he always speak in favour of rising rates and that may not taken well by the markets.
16. On the same day ECB President Draghi will speak in the evening which will be dovish in nature.
17. On Friday people will focus on what Janet Yellen says about future rate hike.
18. Markets are likely to make one big move on either side depending on what RBI does and then may consolidate for the next few days.
19. I am expecting an up move for Nifty closer to 8000 and up move for Bank Nifty closer to 16800.
20. Nifty is likely to take a good support at 7400.
21. One may sell 7400 Put option.
22. Then after seeing the RBI action, one may sell 8200 Call option if RBI move is positive.
23. If RBI move is negative then one may sell 7900 or 8000 Call.
24. It is the risk worth taking.
25. One can sell Bank Nifty 15000 Put option and 17500 Call option and that will give decent profit by Tuesday end as VIX will fall in Bank Nifty after RBI policy.
26. Nifty is likely to trade between 7500 and 8000 this week.