Dalal Street Week Ahead | Stocks and Commodities

May 22, 2016
Time: 11.30 am

Dalal Street Week Ahead:

1.  Last Monday markets opened slightly higher and also closed higher despite big NPA problems from almost all PSU Banks.
2. Fed minutes indicated a likely increase of interest rate in June dented the sentiment all over the world.
3. Asian markets which were in down trend already fell further.
4. We received another blow in the form of further tightening of P Notes regulations.
5. On Friday though global markets recovered some losses, we fell further due to P Note issue.
6. FIIs have sold for about Rs 750 crores on Thursday as well as on Friday.
7. But one good thing on Friday was that India VIX did not go up.
8. That means that the selling may not be more from here.
9. On Friday Nifty fell 30 points but Nifty 7700 Put fell by Rs 7.
10. Nifty has fallen by 65 points last week, not a big deal.
11. Nifty 7700 Put has the highest open interest shows that 7700 is a very good support for Nifty.
12. In a bearish month like May, despite so many bad news like Mauritius treaty, US fed minutes, P Note regulation, delay in monsoon, Nifty is still trading in the range 7700 - 8000.
13. Nifty has been trading in this range for the last 16 trading sessions.
14. Coming to next week trade, as stated earlier Nifty will find good support at 7700.
15. On Monday, ITC may support the market as it declared good results at 3.15 pm on Friday.
16. ITC also declared bonus shares which is sentimentally positive.
17. Markets are likely to be volatile due to expiry related issues.
18. BPCL and Tata Power will declare results on Monday.
19. We will also be reacting to G7 meeting outcome on Sunday.
20. German Manufacturing PMI index will influence the European markets on Monday.
21. On Tuesday, Cipla and Tech Mahindra will declare results.
22. German GDP data is due.
23. New Home sales data is due from US.
24. On Wednesday, Bajaj Auto, L&T and Tata Steel are set to declare their quarterly results.
25. On Thursday, Pending Home sales data and Core Durable Goods order data are the two key data to watch in US.
26. On Friday, BHEL and SBI will declare results.
27. US Q1 GDP data is due on Friday.
28. As long as Nifty holds 7700, we can expect some short covering in Nifty towards the expiry.
29. Earlier I was very bullish and stated that Nifty will expire above 8000 this series.
30. But by looking at the reaction of FIIs due to P Note issue, I do not think Nifty will expire above 8000.
31. We will be happy if Nifty expires around 7850, the level at which Nifty expired in April series.
32. Though IMD forecasted a delay in Monsoon, the monsoon is likely to be very good.
33. Depression brought good rain fall in Tamil Nadu, Sri Lanka has received so much rain that it is flooded, monsoon has covered entire Andaman as per schedule.
34. Any early arrival of monsoon will lift the sentiment in stock market.
35. But that may not happen in this expiry.
36. Interestingly, there is no huge selling in F&O by FIIs is the last two days.
37. I stll expect Nifty future to trade between 7700 and 8000 until the end of this expiry and to break out in June June series.
38. We need to see when this P Note related selling subsides.
39. And that is the time one should consider taking long positions.
40. Be ready for roller coaster ride for the next four days.