DAILY MARKET ANALYSIS

DAILY MARKET ANALYSIS ( 01/11/2018 )


The market is in a downtrend, Bulls are trying hard for a comeback in the game; yesterday both Nifty & Banknifty has given strong buying momentum & ended up with a Bullish pattern for an upside breakout.

For the day on Nifty Future (NF) front, 10200 is a strong Support AND 10440 is mild Resistance. Although after a gap up opening Bulls are not able to hold strong but market breadth is positive.

For the day on Banknifty Future (BNF), 24700 is strong support & no nearby Resistance visible. Public Bank Index is giving the mild support to Banknifty.

For the day heavy Buying/Selling is a must avoidable in both NF & BNF as no free run for both bears/bulls.

 In our last posts, we have clearly mentioned about the breakout, which happened yesterday but does not look much convincing.


DAILY MARKET ANALYSIS ( 31/10/2018 )


The market is in a downtrend, Bulls are trying hard for a comeback in the game, yesterday both Nifty & Banknifty were not able to retain the momentum created by Bulls on Monday, very high possibility of a strong base formation in this week 

For the day on Nifty Future (NF) front, 10030 is a strong Support AND 10310 is strong Resistance.

For the day on Banknifty Future (BNF), 24300 is strong support & 25200 is strong Resistance. Private Bank Index is giving the jolt to Banknifty.

For the day Buying is a must avoidable at higher levels in both NF & BNF as no free run for bulls.

 

In our last posts we have clearly mentioned about the consolidation before any strong Breakout for upside & now it’s happening for 4 days.



DAILY MARKET ANALYSIS ( 30/10/2018 )


The market is in a downtrend, Bulls are trying hard for a comeback in the game & yesterday both Nifty & Banknifty closed with Solid Bullish Pattern & very high possibility of a strong base formation in this week 

 For the day on Nifty Future (NF) front, 10090 is a strong Support AND 10310 is the mild Resistance.

For the day on Banknifty Future (BNF), 24600 is strong support & no nearby Resistance is visible on BNF. PSU Bank Index is giving required boost to Banknifty.

 For the day Selling is a must avoidable in both NF & BNF as no free run for bears.

If we look at the overall market, before starting a Positional Trade there should be some sort of base must be there but here it’s a random bulls entry which is not going as per normal market conviction.



DAILY MARKET ANALYSIS ( 26/10/2018 )


 

The market is in a downtrend; Both Nifty & Banknifty are getting sold at every major Rise. The index hit a fresh seven-month low during the day but managed to show some recovery in later part of the session to close above 10,100 levels. It made a small bodied bearish candle on the daily charts, which resembles a ‘Doji’ kind of pattern.

 

For the day on Nifty Future (NF) front, 10100 is a strong support AND 10300 is very strong Resistance.

For the day on Banknifty Future (BNF), 24700 looks mild support & AND 25400 is very strong Resistance on BNF. ICICI Bank is likely to report a steep decline in the second quarter profit due to elevated provisions and weak treasury income, yet loan growth could support net interest income. Asset quality is expected to be stable with lower slippages and watchlist at the end of the September quarter, might be a weak point for the day on Banknifty.

 For the day Selling is a must avoidable in both NF & BNF after 0.7% decline, on NF front high possibility of visiting 10100-10080 range.



DAILY MARKET ANALYSIS ( 25/10/2018 ) – Nove Series


The market is in a downtrend; Both Nifty & Banknifty are getting sold at every major Rise.

For the day on Nifty Future (NF) front, 10140 is a strong support AND 10300 is very strong Resistance (Yesterday we have seen Bull’s activeness near 10300).

For the day on Banknifty Future (BNF), 24900 looks strong support & AND 25400 is very strong Resistance on BNF.

For the day Selling is a must avoidable in both NF & BNF, on NF front high possibility of visiting 10200-170 range.

 



DAILY MARKET ANALYSIS ( 24/10/2018 ) – Nove Series


The market is in a downtrend; Both Nifty & Banknifty are getting sold at every major Rise.

For the day on Nifty Future (NF) front, 10150 is the support AND 10390-10410 is very strong Resistance (Since two days this week 10400 is acting as strong Resistance).

For the day on Banknifty Future (BNF), 24900 looks strong support & AND 25500-25600 is very strong Resistance on BNF.

For the day Selling is a must avoidable in both NF & BNF, on NF front high possibility of visiting 10320-10350 range.

 

 



DAILY MARKET ANALYSIS ( 23/10/2018 )


The market is in a downtrend; Both Nifty & Banknifty are getting sold at every major Rise.

For the day on Nifty Future (NF) front, there is no support visible AND 10340 is very strong Resistance (Yesterday we have seen the strong attack by Bears near 10340).

For the day on Banknifty Future (BNF), 24800 looks mild support & AND 25500 is very strong Resistance on BNF.

Buying is a must avoidable in both NF & BNF until a formation of a proper base, on NF front high possibility of visiting 11180-11150 range.



DAILY MARKET ANALYSIS ( 15/10/2018 )


The market is in a downtrend; Both Nifty & Banknifty are getting sold at every major Rise.

For the day on Nifty Future (NF) front, 10210 is strong support AND 10520 is very strong Resistance (Friday we have seen the strong comeback by Bulls BUT they were not able to break post-RBI Policy Resistance).

For the day on Banknifty Future (BNF), 24600 looks strong support & AND 25530-25600 is very strong Resistance zone on BNF.

Buying is a must avoidable in both NF & BNF until they take off 10520 on NF & 25600 on BNF., Both Nifty & Banknifty are forming similar pattern that we have seen in July 2018.

 

 


DAILY MARKET ANALYSIS ( 12/10/2018 )


The market is in a downtrend; Both Nifty & Banknifty are getting Sold at every major Rise till yesterday.

For the day on Nifty Future (NF) front, 10190 is strong support AND 10490-10510 is very strong Resistance zone (Friday we have seen the strong attack by Bears near 10510).

For the day on Banknifty Future (BNF), 24500 looks strong support & AND 25540-25600 is very strong Resistance zone on BNF.

Buying is a must avoidable near these heavy Resistance Zone in NF & BNF.

Here two possibilities are visible for Positional Traders –

  1. Sell NF at 10445 with Stop Loss at 10520
  2. Let’s wait for a break of 25600 on BNF & Go Long with SL at 25300

 >>> Here 1st possibility is more favorable as per the current situation of the market

 


DAILY MARKET ANALYSIS ( 11/10/2018 )


The market is in a downtrend; Both Nifty & Banknifty are getting Sold at every major Rise, In comparison to Banknifty, Nifty is under extreme Selling radar.

For the day on Nifty Future (NF) front, 10090 is mild support AND 10350 is very strong Resistance (Today gap down opening due to heavy Sell-off in world markets).

For the day on Banknifty Future (BNF), 24300 looks very strong support & AND 25050 is very strong Resistance on BNF.

Buying is a must avoidable until any proper base in NF & BNF.

No room visible for Positional Traders as no strong base in NF & BNF but a light of Hope visible in BNF if it did not break 24300 for the day & Close above 25100.

Today we have noticed one thing that even after such a gap down, many stocks are showing Buying response, its a positive sign for the market.



DAILY MARKET ANALYSIS ( 09/10/2018 )


 

The market is in a downtrend; Both Nifty & Banknifty are getting Sold at every major Rise.

For the day on Nifty Future (NF) front, 10210 is mild support AND 10520 is very strong Resistance (Friday we have seen the strong attack by Bears near 10520). Buying is a must avoidable until any proper base in NF.

 For the day on Banknifty Future (BNF), 24300 looks strong support & AND 25100 is very strong Resistance on BNF.

No room visible for Positional Traders as no strong base in NF & BNF but a light of Hope visible in BNF if it did not break 24300 for the day & close above 25100.


DAILY MARKET ANALYSIS ( 04/10/2018 )

 


The market is in a downtrend; Nifty is under extreme selling pressure, no support visible on Nifty & 10720 for the day looks in reach.

For the day on Nifty Future (NF) front, 10740 is mild support AND 11000 is very strong Resistance (Yesterday we have seen the strong attack by Bears near 11000). Buying is a must avoidable until any proper base in NF.

 For the day on Banknifty Future (BNF) 24850-24800 looks strong support & AND 25500-25600 is very strong Resistance on BNF.

 No room visible for Positional Traders as no strong base in NF but a light of Hope visible in BNF if it did not break 24850 for the day & close above 25400.



DAILY  MARKET  ANALYSIS ( 28/09/2018 )


 Today is the first day of October series after a 12% fall in Banknifty & 7.6% fall in Nifty in the September series. The market trend is clear cut down; Both Banknifty & Nifty are Sell on rise for the day.

  For the day on Nifty Future (NF) front, 11000 is support AND 11160 is very strong Resistance (Yesterday we have seen the strong attack by Bears near 11140).

  For the day on Banknifty Future (BNF) front, 25100 is support AND 25650 is very strong Resistance on BNF (Yesterday we have seen the strong attack by Bears near 25550).

 Heavy buying or Selling is a must avoid & Sell on Rise is the strategy for the day.

 



DAILY  MARKET  ANALYSIS ( 26/09/2018 – Oct Series)


The market is in a downtrend; Both Banknifty & Nifty are in a Mild buying zone.

For the day on Nifty Future (NF) front, 11000-10970 is strong support AND 11250 is very strong Resistance (Yesterday we have seen the strong attack by Bulls near 10970).

 For the day on Banknifty Future (BNF) front, 24950 – 24850 is strong support AND 26200 is very strong Resistance on BNF (Yesterday we have seen the strong attack by Bulls near 24900).

It’s a neutral market; heavy buying or Selling is a must avoid.




DAILY  MARKET  ANALYSIS ( 25/09/2018 )



The market is in a downtrend; Both Banknifty & Nifty are under extreme selling pressure.

For the day on Nifty Future (NF) front, 11000-10970 is mild support AND 11170-11200 is very strong Resistance (Yesterday we have seen the strong attack by Bears near 11170).

 For the day on Banknifty Future (BNF) front there is no support visible & Buying is a must avoidable until any proper base AND 26000 is very strong Resistance on BNF.

It’s not a Buy market; don’t get trapped by seeing extreme selling, better wait for some short of buying  base.

 




 

September Expiry View 


Friday & today fall in the Market is a nightmare for Option Writer as no nearby strong support is visible & with extreme selling pressure, bears looks overcharged.

For this expiry as per our analysis, Nifty Future should expire below 11450, we are seeing very strong Resistance in 11400-450 range. Even with such a high volatility, it will be very difficult for Nifty future to surpass 11450, but one thing we need to keep in mind it’s not a Buy market, still its Sell on Rising.

Daily Trend is clear-cut Bearish & no relief for Bulls, September is a Clear Bears Month.

 




 DAILY  MARKET  ANALYSIS ( 21/09/2018 )


 

The market is in downtrend AND Both NF & BNF are under extreme Selling pressure.

For the day on Nifty Future (NF) front, 11370-11410 range is very strong Resistance zone (Yesterday we have seen the strong attack by Bears near 11370). In last 5 days, Bulls were trying to defend 11300 on NF & creating some sort of base but yesterday Bears washed their hope & closed below 11300, this clearly shows the strength of downtrend.

For the day on Banknifty Future (BNF) front there is no support visible & 26700-26850 range is very strong Resistance on BNF. Bears are not allowing Bulls even to taken single breath. BNF is, even more, weaker than NF.

 Buyers don’t have any edge & Buying is a must avoidable in both NF & BNF until any proper base.

Daily Trend is Bearish on both Nifty & Banknifty.

On Option Data front 11500 Call option & 11000, 11200 Put options are most active.

 

 




   DAILY  MARKET  ANALYSIS ( 19/09/2018)

 


 

The market is in downtrend & Banknifty is weaker in comparison to Nifty.

For the day on Nifty Future (NF) front, 11300-11280 is a mild support which Bulls likely to defend with full force AND 11400-11445 is very strong Resistance (Yesterday we have seen the strong attack by Bears near 11445). Buyers have a mild edge for the day if they are able to defend 11300-11280 on NF.

For the day on Banknifty Future (BNF) front there is no support visible & Buying is a must avoidable until any proper base AND 26850-26990 is very strong Resistance on BNF.

Daily Trend is Bearish on both Nifty & Banknifty.

On Option Data front 11500 Call option & 11400 Put option is most active.



 

INDEX FUTURE – UNDERSTANDING PREMIUM & DISCOUNT

INDEX FUTURE – UNDERSTANDING PREMIUM & DISCOUNT 

 

Nifty Futures is a financial instrument in which futures contracts are done on the basis of CNX  Nifty index which is the benchmark of NSE. Nifty Futures keep moving in Premium and Discount compared to Nifty Spot price. We hear a lot of experts talking like NIFTY is available at Discount of 20 points? or Nifty Premium is increasing ? So what does they mean exactly.

 

>> What is Premium and Discount in Nifty?

Nifty Premium –If Nifty future is trading higher than nifty spot, then nifty future is trading with premium. The Highest Premium seen in Nifty was 70 points in 28 Feb 2012 expiry when market rose 20% in matter on 2 months.

Premium = Nifty Future Price – Spot Nifty Value

For Eg: Suppose  NIFTY is trading at  5000 and NIFTY FUTURE is trading at  5020 in this case Nifty is trading in Premium of 20 points (5020-5000)

Nifty Discount –If Nifty future is trading lower than nifty spot, then nifty future is trading with Discount.

Discount = Spot Nifty Value – Nifty Future Price

For Eg: Suppose  NIFTY is trading at  5000 and NIFTY FUTURE is trading at  4990 in this case Nifty is trading in Discount of 10 points (5000-4990)

 

What is significance of Discount and Premium availability of NIFTY?

As per Thumb Rule

>>  When discount widens, bearish mood of market is increasing

>>  When premium widens, bullish mood of market is increasing

But at times, things can go the other way round also.

 

>> Sometimes bullishness may also lead to widening of the Nifty futures discount, as explained below:

  1. When FII’s are long on the markets, they short Nifty futures as a hedge.Nifty Futures are less volatile than individual stocks. If the stocks move up, the loss in the futures will be relatively less.This selling results in huge discount in Nifty Futures.
  2. Another reason for Discount happens during result season when Companies declares dividends, Large number of index stocks going ex-dividend and it lead to discount in Nifty.

 

>> Trades should always note when Nifty trades in Premium excessive of 40 points, its a warning bell small correction is round the corner which will lead to lowering of premium in Nifty.

>> Premium and Discounts converges to zero at the closing date of future ie on last Thursday of every month.



 

What is Securities Transaction Tax ???

STT is levied on every purchase or sale of securities that are listed on the Indian stock exchanges. This would include shares, derivatives or equity-oriented mutual funds units.

The securities transaction tax (STT) was introduced in India a few years ago, to stop tax avoidance of capital gains tax. Earlier, many people usually didn’t declare their profits on the sale of stocks and avoided paying capital gains tax. The government could tax only those profits, which have been declared by people. 

To stop this situation, the then Finance Minister P Chidambaram in the Union Budget 2004-05—introduced STT. Transactions in stock, index options and futures would also be subject to transaction tax. This tax is payable whether you buy or sell a share and gets added to the price of the stock at the time the transaction is made. Since brokers have to automatically add this tax to the transaction price, there is no way to avoid it. 

The Finance Ministry has supported the introduction of the STT to simplify the tax regime on financial market transactions. According to the ministry, STT is a clean and efficient way of collecting taxes from financial markets. In the words, STT is a neat, efficient and easy-to-administer tax and it has the great advantage of virtually eliminating tax avoidance.

STT is levied on every purchase or sale of securities that are listed on the Indian stock exchanges. This would include shares, derivatives or equity-oriented mutual funds units. The rate of tax that is deducted is determined by the central government, and it varies with different types of transactions and securities. STT is deducted at source by the broker or AMC, at the time of the transaction itself, the net result is that it pushes up the cost of the transaction done.

Scope of STT

  • According to the Securities Contracts (Regulation) Act, 1956, STT would be applicable on following securities.
  • Shares, bonds, debentures, debenture stock or other marketable securities of a like nature in or of any incorporated company or other body corporate
  • Derivatives
  • Units or any other instrument issued by any collective investment scheme to the investors in such schemes
  • Security receipt as defined in section 2(zg) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
  • Government securities of equity nature
  • Rights or interest in securities
  • Equity-oriented mutual funds
  • STT is not applicable for any off-market transaction.

STT rate

  • Finance Minister P Chidambaram in the Union Budget 2013-14 has cut the STT (securities transaction tax) on equities and mutual fund units. STT reduction on ETF is expected to enhance returns with lower transaction costs.
  • The STT charge on equity futures is cut from 0.17% to 0.1%. In the previous Budget, STT was slashed by 0.17% from 0.125% on cash delivery transactions.
  • The STT charge on redemption of mutual funds or ETFs (exchange traded funds) at fund counters is reduced from 0.25% to 0.001%, while STT on sale of MFs or ETFs on stock exchanges is cut from 0.1% to 0.001% levied only on the seller.

Deductions

So the next time, your broker or asset management company sends you your transaction bill or statement, remember that the extra bit you are paying over and above your transaction is nothing but the tax that has been levied. Whether it is the purchase and sale of shares or mutual fund units, STT will stay and cannot be avoided. At the end of the year, you can ask your broker to give you a certificate of the STT that you have paid through the year. You can use this amount to deduct from your short term capital gains and get a tax credit.