Dalal Street Week Ahead, July 10, 2016 | Stocks and Commodities

July 9, 2016
Time: 11 am

Dalal Street Week Ahead:

1. Last week, markets consolidated and closed almost flat on weekly basis.
2. This is just a calm before storm.
3. Tomorrow is the beginning of results season with IndusInd Bak declaring results tomorrow.
4. IndusInd Bank closed very close to all time high on Friday.
5. This shows that we are starting the corporate results season with good amount of optimism.
6. Duw to very good jobs data, US markets closed almost at all time high.
7. SGX Nifty hit a high of 8410 and closed at 8406.
8. So tomorrow Nifty future may open above 8400 and Bank Nifty future above 18250 and will build on the gains if IndusInd Bank results are good.
9. On Tuesday, IIP data and CPI Inflation data will out after the markets close.
10. On Wednesday, WPI Inflation data will be out during the market hours.
11. On Wednesday China's trade balance data is a key data to watch before our markets open.
12. On Thursday, TCS will declare results after the markets close.
13. On Friday, Infosys will declare results around 9.15 am.
14. So on Friday, our markets will react to both TCS and Infosys results.
15. On Friday after the markets close, Reliance will declare results.
16. On Friday, before our markets open, China's GDP data will be out.
17. Let us look at what happened just before results season three months before.
18. Nifty was trading around 7700.
19. But between then and now, 3 out of top 4 index heavy weights, Infosys, TCS and Reliance, are down by 5 to 10%.
20. ITC is the only index heavy weight gained during the last three months.
21. Yet Nifty is nearly up by 10% just because of other stocks.
22. So, if TCS, Infy and Reliance catch, may be after good results by the end of this week, where the index will go?
23. The real action will begin in the week starting July 18, when many Banking stocks like Axis BAnk, Kotak Bank, HDFC Bank declare results.
24. Also there will be clarity in GST bill in that week.
25. So if Infosys, TCS and Reliance catch up after good results and GST bill is passed, why Nifty can not move towards 8700?
26. The reports about the progress of the monsoon has been very good.
27. The only problem few days before was the bad global cues.
28. But now that also seems to be improving.
29. Even today inflation data from China was good.
30. I am taking a very bullish view about the markets in July.
31. In fact I sold lot of Put options.
32. I sold Bank Nifty Put options right from 18000 Put to 17000 Put.
33. In addition, I also bought Nifty 8500 Call options.
34. Usually I only sell options.
35. But this time I bought options heavily.
36. Yesterday I bought Nifty 8500 Call options, Bank Nifty 18300 Call option in weekly options and 19000 Call options in monthly options.
37. Luckily markets will be opening with a huge gap up tomorrow.
38. Either I will llok to book the profits or will keep trailing stop loss for the positions.
39. Next three weeks will be exciting weeks for the stock markets.
40. Let us see what happens.