Global cues:
• Wall Street’s major indexes fell on Tuesday as lawmakers geared up for gruelling talks over the coronavirus relief package and investors also weighing on a mixed batch of earnings from blur-chip companies.
• European markets inched higher on Tuesday as investors held out for more U.S Stimulus to limit the economic damage of COVID-19
• The international gold price raced to a record high; With the continued rise in COVID-19 cases across the globe leading to unprecedented economic turmoil, UBS now expects the gold price to cross $2,000 per ounce in the next 6-12 months.
• Trends on SGX Nifty indicate a positive opening for the index in India with a 25 points gain despite US market closing in red and pressure on Asian markets
Indian markets:
•
Sensex and Nifty ended with gains on Tuesday led by IT and
auto stocks. Better than expected corporate earnings for Q1FY21 amid strong
global cues boosted investor sentiment.
•
Almost all indices ended in green today. Strong buying
sentiment has been seen.
•
FIIs were net buyers of worth Rs.245.95Cr and DIIs were net sellers of worth Rs. 1017.4Cr
•
Nifty Auto was the best-performing index, followed Nifty IT
and Nifty Metal.
•
Gold touched the life time high at Rs 52.435 levels; and this
rally in bullion is expected to will continue. Gold may test Rs 53,000
levels.
•
Shares of UltraTech
Cement ended over 7 percent higher after
the company's Q1FY21 earnings beat street estimates
•
HDFC Life Insurance hit an all-time high of Rs 647.50 on the
BSE during the day ahead of its inclusion in
the benchmark index Nifty50 from Friday, July 31, 2020 onwards
•
The contribution chart for Nifty is shown below:
Trends:
•
We saw bullish
candles on daily charts as the closing was much higher than the opening level.
•
The
index broke out from the consolidation range as it surpassed 11,250 levels and
if the momentum continues today, it can head towards 11,350-11,500 levels.
•
If nifty stays in the upward rising channel and maintains its
short-term trend, a mild corrective action or ranged consolidation cannot be
ruled out. However, shoring aggressively is not recommended as a lot of
discomfort is visible at lower levels.
•
People should book profits from time to time as exact top is
not clearly known.
• Also, watchout for Fed news on Wednesday evening can shift market sentiment.
Option strategy for tomorrow:
•
The
short-term trend of the Nifty is positive.
•
However
it can consolidate tomorrow and is expected to be rangebound. However short
covering or profit booking cannot be ruled out.
• BankNifty looks like it has seen bottom at 21640 levels
•
Nifty’s expected range tomorrow can be 11200 to 11420.
•
Upside resistance is at 11340 & 11390 levels
•
Downside support is at 11200 & 11260 levels
• Maximum call OI of 43 lakh contracts was seen at 11,500 strike which will act as crucial resistance for the week
• Maximum put OI of 50.28 lakh contracts was seen at 11,000 strike which will act as crucial support for the week
• The key global cues to watch out for is the outcome of Fed Meet. Besides, that, on domestic front announcements from companies and auto sales numbers would be on the radar. It is advised to continue with a positive yet cautious approach as the Nifty is inching closer to the next hurdle at 11,350 levels.
Results on July 29
Bharti Airtel, Maruti Suzuki India, Dr,
Reddy’s Laboratories, TVS Motors, Interglobe Aviation, CEAT, Colgate-Palmolive,
GSK Pharmaceuticals, JK Paper, Navin Flourine
Source: moneycontrol
Knowledge Capsule- Iron Candor
• View: Range Bound Movement (we expect Nifty to stay
within a range till expiry)
• Implementation:
• Sell 1 OTM Call and Put option each
• Buy 1 further OTM Call to protect the short call
• Buy 1 further OTM Put to protect the short put
Take Nifty current price: 9972
Sell 9800 PE option (OTM) @ 165rs premium (Get 165)
Sell 10100 CE option (OTM) @ 145rs premium (Get 145)
We
will get net 310rs premium
Buy
9600 PE (Further OTM) @ 105
Buy
10300 CE (Further OTM) @ 77
Net
premium received after buying these 2 options: 310-105-77= 128
- Nifty expires
at 9900
All 4
options are zero
Our
profit is our initial premium payoff, 128Rs
2. Nifty
expires at 10500
Put
options will be zero
10100
CE is 400
10300
is 200
Net
payoff = -400 +128 +200 = 72 Loss
3.
Nifty expires at 9400
Call
options would be zero
9800 PE is 400
9600 PE is 200
Net payoff = -400 + 128 +200 = 72 Loss
•
As we can notice,
•
The Max Loss is limited no matter where NIFTY expires at the end, so we’ve
hedged our risk
•
In the above table, you can check the payoff at all expiry prices.
Notice our profits are also limited side.
•
Iron Condors are now possible with the new margin trading requirements,
• The above trade which was took as an example would earlier take 2.2 Lakhs as margin but after 1st June 2020 it is taking only 40k since the margin requirements for market neutral positions have been decreased by SEBI
Please note that all the recommendations/views/ levels we provide are based on the theory of technical/fundamental analysis and personal observations. This does not claim for sure/ certain profit or any fixed returns. we are not liable for any losses you make on the given takes and levels. You are advised to take your position with your sense, discretion, and judgment. only you would be responsible for outcomes of your trades
Analysts at work:
No comments:
Post a Comment