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Thursday, 15 May 2014

Will Nifty hit upper circuit on 16th May 2014 or on 19th May 2014

Hi,

There is a curiosity about whether Nifty will hit an upper circuit after general elections results are announced on 16th May 2014. Here we are presenting our views : 

A closed full circuit can be hit only during opening. As day progresses, volumes rise, and there is no question of circuits getting markets closed. We have seen down circuits in October 2008 when Nifty fell 15% during the day without getting markets closed. 

Clear picture will come only by late evening, and then on Monday we can have a upper circuit like situation but still no upper circuit. On 16th May 2014, because of see-saw like situation while counting procedure is going on, market will remain confused most of the time and go sideways. If before 3:30 PM, 272 mark is hit, then razor sharp move will be seen. 

But what are the ingredients needed for an upper circuit ? Most importantly there must be sufficient amount of opposite positions needed to create panic in the bear camp. At the derivative front we are seeing big amount of sell positions building up daily which we are mentioning in our daily reports. So, at least on the derivative front, traders are not complacent at all regarding this bullish euphoria. 

Exactly same situation was seen in May 2009 when traders were building big short positions near 200 moving average resistance area. Hangseng was too near such resistance, and our markets witnessed breakout and kept moving higher after that , but Hangseng has yet to come near 2008 highs.

Today too Nifty future saw fair amount of short built up with premium falling to 20 points. Big amount of sell figures in all segments are not pointing towards bullishness at all, so a reverse is a big possibility.

Below is the derivative turnover of FIIs for current series : 
MAY 2014 SERIES TURNOVER ( Cr )
INDEX FUTURES -1312.10
INDEX OPTIONS -7363.40
STOCK FUTURES -5312.10
STOCK OPTIONS -69.13




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