Nifty

In the month of September 2013, after the nomination of Shri. Narendra modi as BJP’s PM candidate we have seen markets getting stronger. Market participants started expecting NDA will form govt at center. As the the exit polls were out, we saw markets creating new all time high, ahead of actual results. On the day of results declaration, we saw nifty touching all time high of 7600, but in last few trading hours most of those gains were given up. We saw tremendous increase in long positions in many index heavy weight stocks, also nifty future was seen adding long positions to its Open Interest.

Nifty puts have seen tremendous writing after the election results. Also, we believe that markets may remain in its strong uptrend for a long time. Therefore we will be looking for taking long positions on large cap and mid cap stocks.

You can check our Nifty trend finder tool.

We are very bullish on Banking stocks, Capital goods, PSU, Power, Infrastructure and Irrigation stocks. In banking our favorite picks are SBIN, BANKBARODA, YESBANK and PNB. From capital goods, buy LT and BHEL as both are looking extremely good. In PSU we find NTPC, NMDC, POWERGRID are best to buy. From power sector, we are bullish on TATAPOWER, RPOWER and TORNTPOWER. In infrastructure sector, we will be buying into JPASSOCIAT. Jain irrigation seems a better pick from agriculture pack.

Trading idea on Nifty options:

We will be looking to sell out of money put options, selling 6800 put options. We are see nifty in uptrend, but we are not sure when that fresh up-move will come. So it would be a wise strategy to write nifty 6800 put options.

Trading analysis for Nifty future:

Nifty future is now a long only instrument, at present fresh positions must be on long side only. Nifty is already 6% down from its all time high, but technical indicator is not showing any signal to buy at this moment. Some more profit booking is likely, but trend remains up.

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Article published on 2.6.14

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