Thursday, February 8, 2018

morning thoughts...

The expectations from the budget was on the lower side and unexpected lines and the markets saw a fall from higher levels in 3-4 days which was also against our expectations and views
The quantum and major gains made in january saw a dent and wipe in just 3 days with hdfc, bajaj auto , axis bank , jub foods , jsw steel , tcs , icici bank giving major returns in january and tata steel , bajaj auto , hindalco , axis bank , zee tv on loss side in february 3 days and now low beta and rsi stocks are the picks for coming sessions as markets sways on both sides tricking both long and short traders as it lacks direction and implies major volatility
The rise in vix and bonds is an indication that situation will be tricky and markets will swing on both ways with high implied velocity and there might be many false breakouts and break downs on charts which may trap traders 
We were high on bajaj auto for a move of 300-400 from 3350 as it gave a triangle breakout at 3350 and saw a good upmove but again saw a sell off on false breakout and reversed our call  , same was witnessed in many stocks in the markets which showed false breakout 
Technically the markets are in uncharted territory for both long and short traders and may see wild swings on both sides with occasional bounce backs and sell offs during a day 
Stocks with value and low pe will see good accumulation on lower zones or the ones with lower rsi and 30 dema value as compared to daily moving average
The markets have opened with lower bottoms and gaps in index and stocks with false breakouts and stocks like tata steel , yes bank , hindalco though on accumulation zones has hit us on higher side with going reverse from our direction and call but remains on triangle zones for good trades
On the contrary jsw steel , ashok leyland , coal india , lic , axis banks are few stocks which are seeing buildup in oi with reverse put writers which indicates a good long position in the same pertaining to volatility 
Rising bond yields will disturb the interest rates of nbfcs which can see pressure , but divergence and multiple business holders will not be effected much so shriram transport finance , chola finance , manapurram finance can be added at dips
Rising crude has put immense pressure on omcs and they continue to trade range bound with negative bias , however few breakouts are witnessed in hpcl , igl and coal india which can be realted to crude 
Bpcl is near supports of 355 and major supports at 365 from where it can see a rise following peers , ioc is better left aside
The markets after the budget and monetary policy for the banks will not be a major issue and psu banks seems to be near term bottom and can be added on dips in sip manner, private banks will follow them
Pharma and IT sector looks good in the current markets and is a buy keeping in mind the volatility 
The markets will now trade and swing on both sides so one must be ready to see the volatility throughout
Commodity markets remains subdued and no major move is seen in either bullions , base metals and energy , however the strategy remains to buy on dips in same for small trades


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