Market Outlook for Opening on December 06, 2018

Stock/ Index

NIFTY 50

Long term trend

In spite of the almost 1% cut today, still is mildly positive but still inconclusive

Short term trend

Has turned flattish and spot is close to the trendline

Bollinger band

The spot is above the MA and in the middle of the upper channel

Oscillator 2

Bullish (gap is narrower)

Oscillator 3

Positive cross over persists, however, the strength is diminished

Closing price (Spot price)

10,782.90

Change from previous day

-0.80%

Nifty future premium (december expiry)

 + 50.95

Current position bias

Short bias, better hedged compared to yesterday

Maximum Open interest

Puts of 10,000 / 10,200 / 10,500 / 10,700/ 11,000 Calls of 10,900 / 11,000 / 11,500

 

Conclusion

  1. As expected the RBI policy was nuetral today, however, a slew of measures have been announced in the future. The bond yields have reacted very sharply as compared to equity markets. The movement in yields portend well for the equity markets.
  2. As noted yesterday, not only was the markets weak, but also the initial reaction to the Monetary policy has been negative. Post which we see that a lot of Puts from 11,100 to 10,800 have shed OI while Calls have added OI at 11,100 & 11,200. This indicates that the market range may be moving higher.
  3. The technical undertone remains positive and the markets may take a pause here before reacting to the various other events lined up.
  4. In my view the most important even has passed and it has failed to generate any trigger either side of the market. I feel that markets are waiting for a positive news to shoot back up. It would be good for the markets if it lingers on at this level for the next few sessions before it makes an upmove.
  5. The closing indicates that Markets may have gap up on the opening, however, still not a time to buy into the market, need to wait before buying. Suggest exiting long positions on the opening and feel that throughout the day you will get ample opportunities to re-enter.

 

Disclaimer: The views expressed herein are purely personal and basis experience and not a recommendation to buy or sell. We are not SEBI registered investment advisors or research analysts and these are positions taken in personal capacity.