Monday, 4 June 2018

Market outlook and trade setup for Tuesday

Market open with gap up following global clue but 10770  worked as strong hurdle and all efforts of bulls to breakout went in vain and market broken the support short term support of 10700 and 10680 in first 30 minutes of the market and after that bear have took the control and drag the market to test the support at 10620,nifty has closed with  Bearish Engulfing Pattern which shows negative bias in short term but need further confirmation and further down side below 10610 can dragg the market to 10550. India VIX moved up by 2.30 percent at 13.88 levels. On the options front, maximum Put OI is placed at 10,600 followed by 10,200 strikes while maximum Call OI is placed at 11,000 followed by 10,700 strikes. Nearly 600 stock made 52 week low and most of talks in market on further weakness on these stock and certainly not are the case of bottom finishing at present without confirmation of reversal and certainly sign of britishness in the market aat present if you ignore the index.

open-interestIn  other hand Momentum was seen in just a handful of stocks. As many as 228 stocks hit a fresh 52-week high in May. These shows strength in these stock and further consolidation by investor in stocks which are showing strength.  
Experts are advicing to remain in quality stock in the market and and suggesting caution in long trade.
In my opinion market has made profit booking prior to RBI event which is very well discount, increase in rate on interest  is very much on card and in case of any postponement on same will be Positive for the market, Global market are range bound but cautious before the submit and data on trade balance and further escalation of trade war signals from usa, europe and china.  which will be certainly have a impact on commodity, inflation and all world equity and bound market. Gold Rate steady looking to probable rate hike by the fed wayforward, The Federal Reserve should continue to raise rates gradually over the next two years, a U.S. central banker said on Friday, with higher borrowing costs perhaps beginning to act as a brake on growth starting early next year.Brent crude oil futures dipped for a second session on Monday, with prices coming under pressure from record U.S. output and expectations of higher OPEC supplies. Global benchmark Brent was down 92cents, or 1.20 percent, at $75.90 and as per expert Crude oil remained under pressure as the market remained focused on the discussion between OPEC members about whether they should increase production later this year as per experts opinion and its certainly good sign of our market.

Option Summary

In terms of open interest, the 11,000 Call option has seen the most call writing so far at 39.74 lakh contracts.The second-highest buildup has taken place in the 10,700 call option, which has seen 31.79 lakh contracts getting written so far. The 10,800 and 10900 call option has accumulated 27.28and 25.36 lakh contracts. Call unwinding was seen at the strike price of 10,600, which shed 9.31 lakh contracts
Maximum open interest in put options was seen at a strike price of 10,200, in which 35.30 lakh contracts have been added till date.The 10,600 put option comes next, having added 34.69 lakh contracts so far, and the 10,300 put option, which has now accumulated 27.63 lakh contracts.
Put writing was seen at the strike price of 10,600 followed by 10300 and 10200 which added 3.77 
and 3.4 lakh. Put unwinding seen at 10900 and 10800 level.

FIIs and Institution Turnover 

Foreign Institutional Investors (FIIs)  for the change after a long time stood as net buyer of 2354 cr in cash and DII sold shares worth Rs 712 crore, In future also FIIs come out as net buyer of 553 cr but have sold in index option and future for 443 and 1587 crores as per NSE update.