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Thursday, 6 March 2014

Nifty analysis forecast for 7 March 2014 - 6 March 2014

Nifty analysis for 6 Mar 2014

Nifty opened gap up instead of gap down as we expected it to be. Gap up can be attributed to the CAD(Current Account Deficit) which narrowed to 0.9 percent in Q3FY14. CAD slipped sharply to USD 4.2 billion (0.9 percent of GDP) in October-December quarter of FY14 from USD 31.9 billion (6.5 percent of GDP) in same quarter last year. 


Note that we mentioned on 12th Feb 2014 itself that post 28th Feb 2014 there would be one sided move and this is what is happening.
http://nifty-forecast.tracknifty.com/2014/02/nifty-march-2014-prediction-forecast.html


We were expecting upside towards 6400 after some pullback. But markets makers have their internal understanding. We mentioned 6350 as stop loss for shorts, and today markets holded 6350 for most of the time before inching higher. Without wasting time we exited and turned buyers.

Buying came across the board, and this all round buying at higher levels is very dangerous.  This buying can take markets to 6990 which is the technical target. Market took its time to form a base and move higher. Realty sector gained 4.25% and pharma sector closed in red. IT remained flat. BankNifty contributed 179 points.

Big shuffling across the board is seen. A prominent example been HINDALCO which first started with sell on rise, is now buy on dips. Same is the case with many other stocks like UNITECH, HDIL etc. Major shuffling is happening in many stocks towards north. 

We are not fighting with the markets and taking things as they are happening. 

FIIs were very enthusiastic and bought 1272Cr in equity segment.

FII trading activity on NSE,BSE and MCX-SX in Capital Market Segment(In Rs. Crores)
Category Date Buy Value Sell Value Net Value
FII 06-Mar-2014 4038.742765.81 1272.93
DII 06-Mar-2014 989.17 1556.27 -567.1

And in derivative segment they continued their stock futures buying taking the total to 1624.25Cr in March 2014 series. 6500 CE saw fair amount of writing and 6400 PE saw fair amount of writing too. This same thing was observed on 28th Feb 2014 in 6300 CE and 6200 PE. Nifty future saw increase in premium with premium rising to 30 points. But OI addition still remains low with only 2.83% shares getting added in Nifty future. Traders are still skeptical and must be waiting for a dip for aggressive longs. This dip should come by around 14th March 2014 as mentioned in our TIME forecast report.


FII Derivatives Statistics for March 2014 in Cr.
INDEX FUTURES 1838.60
INDEX OPTIONS 2825.30
STOCK FUTURES 1624.65
STOCK OPTIONS 91.94



FII DERIVATIVES STATISTICS FOR 6-MAR-2014
BUY SELL OPEN INTEREST AT THE END OF THE DAY
No. of contracts Amt in Crores No. of contracts Amt in Crores No. of contracts Amt in Crores
INDEX FUTURES
82922
2611.03
52207
1649.70
342736
10853.47
INDEX OPTIONS
469291
14538.65
429020
13200.58
1305475
41547.35
STOCK FUTURES
87871
2800.31
75957
2453.90
1027050
32250.31
STOCK OPTIONS
43815
1305.11
44553
1322.44
48642
1464.71

Stock ideas update

YESBANK has broken out of its trading range and is rising like a rocket. Our Yesbank strategy is already a hit and we are in running profit of 92.5%.

HINDALCO has gone beserk and now like LT, only sky is the limit. No targets, only trailing stop loss of 5% in that for buyers. Those who want to buy it can wait for a red day to take positions in it.

HDIL has witnessed a major breakout today like many realty stocks. In our yesterday's report we wrote about its potential comparable to YESBANK. And today it happened exactly like that. Last hurdle is 46.23. Above this level, it too will join the family of HINDALCO and LT.

WIPRO saw selling along with other IT stocks. After CAD numbers coming good, USD was weak putting pressure on IT pack. WIPRO made low of 583 and just saved its buying zone of 582. Below 582, 574 is very tough support and we don't see it getting broken in this series.

Trade update

Yesterday we took a short position in Nifty futures and today it stopped out with loss of 33 points.
http://nifty-trade.tracknifty.com/2014/03/nifty-march-2014-series-trade-4-closed.html

We had ample reasons for this short position. We don't take any position without proper study.

Upon seeing various parameters we took long positions in Nifty future and JPASSOCIAT call option. 

http://nifty-trade.tracknifty.com/2014/03/nifty-march-2014-series-trade-5-6-march.html

http://nifty-trade.tracknifty.com/2014/03/nifty-march-2014-series-trade-6-6-march.html

Our total profit now stands at 
Booked : 24 Nifty points and 55% Option gains
Running : 34 Nifty points and 92% Option gain in YESBANK

Nifty forecast for 7 Mar 2014

Nifty is expected to move higher towards 6470 spot and 6500 Nifty future. 

Advice for traders

Sell any sharp gap up for target of 6400. Any sharp gap up should be highly unstable. 

If Nifty opens flattish, then go long with stop loss of 6400 strict for target of 6470 spot. Avoid overnight longs at all costs. Go long only above 6400.

Levels for trading : 6470 - 6400 - 6370.



Anjum S Khan
admin@tracknifty.com
Admin/Analyst
TrackNifty.com