thetaflo – Thetaflo Strategies LLP

September 05, 2023 – Market Overview

thetaflo — Tue, 05 Sep 2023 05:34:49 +0000

Hello reader, hope you’re doing well. While markets may see a flat opening in Tuesday trades with a slightly negative bias, the undertone could remain positive if benchmark Nifty stays above the 19227 mark. The risk mood has improved considerably as Friday’s softer than expected US August payrolls report suggests that September rate hike could be off the table. Technically, after the last two days’ sharp rebound, Nifty’s 19650 zone shall be the major hurdle to cross. However, a cause of concern in the near to medium term will be the erratic monsoon spell, and if the rains play truant, inflation factor will once again come into play, which could hurt market sentiment going ahead.

Important points to note:

Nifty after forming a good base, close to it’s immediate resistance zone of 19600-650, crossing this can be the start of a new rally.
Grasim has given a breakout from the 1850 zone which has been the key point to cross in the last 1.5 years.

In the PSE basket, few stocks like NTPC, PFC and REC are showing signs of cooling off after a good 3 month rally, can look at partial exits if holding these names in portfolio.
Thanks to a stellar run in its shares this year, IDFC First Bank has entered the elite club of 10 most valuable listed lenders in India, replacing Union Bank of India and Canara Bank with a valuation of Rs 65,325 crore as of September 4.
Nifty MidCap breaches 40,000 mark first time, SmallCap index scales record high as well.

As always, risk management is key, and a proper system in place prevents one from losing out too much, in case of outlier events. Have a good trading day, and may the force be with you!

Disclaimer: this post is for educational purposes only, we are not SEBI registered analysts. Trades mentioned here are not trade recommendations. Equity Investments are subject to 100% market risk, please consult your financial advisor before investing.

September 04, 2023 – Market Overview

thetaflo — Mon, 04 Sep 2023 06:39:05 +0000

Hello reader, hope you’ve had a good weekend. Early optimism could be seen in local markets on the back of steady to firm gains in many Asian peers after China announced stimulus measures to revive its sagging economy. In case the FII sentiment improves, we may see extended gains as recent economic data such as robust GST collections, strong auto sales numbers for August, and higher Q1 GDP numbers suggest that global macroeconomic uncertainty has not affected India’s performance. Technically, after Friday’s sharp rebound, the bullish sentiment may continue, and in the backdrop of strong global cues Nifty’s hurdle remains the 19650 mark.

Important points to note:

Nifty has given a falling trendline breakout as of today. Gap filling from open to friday’s close likely, post which we can see a continuation of the rally.
Coal India looks good for a rally upto 270 levels.
Canara Bank being one of the strongest in the PSU basket for a good upside upto 370-400 levels.

As always, risk management is key, and a proper system in place prevents one from losing out too much, in case of outlier events. Have a good trading day, and may the force be with you!

September 01, 2023 – Market Overview

thetaflo — Fri, 01 Sep 2023 05:40:00 +0000

Hello reader, hope you’ve been doing well. Back here after a short break, as I’d been travelling for work. Continuing with the ongoing theme, markets may see sharp sideways movement on either side during intra-day trade due to lack of firm cues from global equities. Select auto stocks could be in focus which will react to monthly sales numbers to be announced today. Other than weak global macros, India’s rainfall deficit last month is a cause of concern as any extended dry spell could further worsen the sentiment.

Important points to note:

Nifty has been in a lengthy corrective phase for more than 1.5 months now, but once we cross the 19650 mark we’re in for a fresh rally upto 21000 levels.
Maruti has successfully broken out into a fresh ATH zone, which indicates the beginning of a good upside from current levels. First time it hit this level was in 2017, then again in 2018, and finally now once in July and again today.

In the PSE basket, two stocks to watch out for are Coal India and GAIL, with good potential for a 10% upside from current levels.
PSU banks are also gearing up for a good rally from current levels, stronger ones to watch out for being Canara Bank, SBI, Bank of Baroda and Federal bank.
With today being the first day of the september monthly series but also the final closing day for the week, we can expect a dip in volatility also fueled by the drop in INDIA VIX.

As always, risk management is key, and a proper system in place prevents one from losing out too much, in case of outlier events. Have a good trading day, and may the force be with you!

August 18, 2023 – Market Overview

thetaflo — Fri, 18 Aug 2023 06:07:08 +0000

Hello reader, hope you’re doing well. Markets are likely to see a weak opening on the back of bearish global cues, as the rising US bond yields continue to create havoc in world currency markets, fuelling a sell-off in equity markets. While depreciating currency continues to spook markets, the relatively weak macro-economic scenario like rising domestic inflation, FII fund outflow, Chinese slowdown and the US Fed signalling more rate hikes to contain inflation can prompt investors to book profits.

Important points to note:

Nifty still in it’s corrective phase, but anytime soon we can see a good bottom formation and a quick euphoric rally towards new ATH levels.
This expected rally can take some time to play out, so traders have to be patient.
PSE stocks have consolidated for a good 2 weeks now, can expect a continuation of the rally and a good upside in stocks like GAIL, Powergrid and BHEL.
Banknifty being much stronger in this fall, with metals dragging down nifty.

As always, risk management is key, and a proper system in place prevents one from losing out too much, in case of outlier events. Have a good trading day, and may the force be with you!

August 17, 2023 – Market Overview

thetaflo — Thu, 17 Aug 2023 05:14:01 +0000

Hello reader, hope you’re doing well. Global market cues remain deficient. Global stock markets are currently under pressure from two factors: One, the US Fed minutes show that one more rate hike in this rate-hiking cycle may be required to keep inflation under control. Two, Chinese macro data show that the economy is slowing faster than previously anticipated, weighing on global economic growth. In this context, the Indian market is unlikely to sustainably break out to newer highs and decouple from the rest of the world. A dramatic correction, on the other hand, is unlikely.

Important points to note:

PSU banks going strong for today, with PNB being one of the top outperformers for the day.
Nifty looks likely to continue consolidation in the 19300-500 zone.
India VIX at 12.5 levels is a very good sign for option sellers, finally premiums are much higher which helps in gaining well on trades once we have another drop in VIX in the future.

As always, risk management is key, and a proper system in place prevents one from losing out too much, in case of outlier events. Have a good trading day, and may the force be with you!

August 16, 2023 – Market Overview

thetaflo — Wed, 16 Aug 2023 06:04:32 +0000

Hello reader, hope you’re doing well. Belated independence day wishes to you all! Markets are expected to open lower in Wednesday trades, as a combination of factors such as rising US bond yields, a slowdown in Chinese demand, and a hawkish Federal Reserve has contributed to risk aversion among investors. Furthermore, FIIs selling shares in domestic markets, combined with the RBI’s upward revision of inflation estimates, has made investors nervous about the markets’ near- to medium-term prospects. Technically, bears have complete control, with immediate downside danger at the 19251 level and anything over the 19757 level fueling an increase.

Important points to note:

Nifty is at a good base building point here, gearing up for a rally to 20500-21000 in the near future.
Grasim is a good candidate for longs from current levels, a break above 1860 levels can result in a good rally upto 2000 levels at the very minimum.
PSU banks are also setting up for a good rally from here for the next few months.

As always, risk management is key, and a proper system in place prevents one from losing out too much, in case of outlier events. Have a good trading day, and may the force be with you!

August 14, 2023 – Market Overview

thetaflo — Mon, 14 Aug 2023 05:46:19 +0000

Hello reader, hope you’re doing well. Markets are likely to see a weak opening in Monday trades owing to pessimism across the Asian indices. While intra-day volatility will persist, both CPI and WPI numbers for July to be announced after the market hours will be keenly watched, especially at a time when interest rate levels across the globe remain elevated due to perennially high inflation. Also, the FII camp is in a sell mode this month and have offloaded shares worth Rs 4,702 crore in the previous week, which is making investors jittery in the wake of global economic uncertainty. Investors will pay close attention to the minutes of the Federal Reserve’s July policy meeting to trickle in on August 16.

Important points to note:

Nifty sustaining below 19300 will increase the chances of a retest of 18800-900 zone soon.
Banknifty similarly needs to hold 43800 levels, else the chances are good we see 43500-43000 levels on the index from here.
SBI is at a pretty good level for accumulation for long term portfolios, a good 20%+ upside potential from current levels.

Similar view for Maruti as well, a good accumulation point for long term portfolio at current levels.

The most underrated investing skill is lacking FOMO.

As always, risk management is key, and a proper system in place prevents one from losing out too much, in case of outlier events. Have a good trading day, and may the force be with you!

August 11, 2023 – Market Overview

thetaflo — Fri, 11 Aug 2023 05:17:55 +0000

Hello reader, hope you’re doing well. Markets may edge lower in early Friday trades despite overnight gains in the US markets after the July inflation numbers there rose slightly less than expected. The inflation report bolsters expectations that the Fed is done hiking rates. On the domestic front, post the monetary policy outcome, the focus will be on today’s IIP numbers to be released after the market hours. If the June core sector data meet expectations, it would further showcase India’s growth is on the right track despite a sluggish global economic scenario.

RBI kept interest rates unchanged on expectations that inflation fuelled by high vegetable prices could reverse quickly, but asked lenders to set aside more cash as reserves to ensure surplus liquidity doesn’t stoke price further. RBI has also asked banks to increase efforts to maximise recovery from written-off accounts, with data suggesting that banks have written-off almost 15 lakh crores worth of bad loans in the last 9 years.

PSU banks are a good bet for further upside from current levels. Keep an eye out for the major leaders in this sector and make the most out of this opportunity.

As always, risk management is key, and a proper system in place prevents one from losing out too much, in case of outlier events. Have a good trading day, and may the force be with you!

August 10, 2023 – Market Overview

thetaflo — Thu, 10 Aug 2023 05:16:31 +0000

Hello reader, hope you’re doing well. Volatility is likely to be the hallmark of the day, as investors look forward to the RBI’s credit policy outcome on interest rates and its forward looking comments on economy and inflation. The outlook will give some sense to investors on where the inflation and economy could be heading in the near to medium term. Also, markets will keep a watch on the US inflation data to trickle in the evening today, which could determine the Federal Reserve’s September interest-rate decision and the path forward from there.

Important points to note:

RBI keeps rates unchanged for now, which is a good sign for the upcoming months in our economy.
Nifty at a crucial point of 19500 levels, a key pivot point which will decide the trend further.
Banknifty on break of 44500, can scale down to 44000-43800 levels as well.
VIX slowly inching up towards 12, good for option sellers here as it results in premiums increasing, creates more opportunities here.

As always, risk management is key, and a proper system in place prevents one from losing out too much, in case of outlier events. Have a good trading day, and may the force be with you!

August 09, 2023 – Market Overview

thetaflo — Wed, 09 Aug 2023 05:44:36 +0000

Hello reader, hope you’re doing well. Missed out on writing the blog for the last couple days due to work travels. Market may record early dips even with an uptick in the Gift Nifty index although US markets ended sharply lower in overnight trades while Asian gauges are displaying a mixed trend. Investors would be cautious after Moody’s downgraded the debt ratings on a number of small and midsize U.S. firms and said it may downgrade the credit ratings on six major U.S. banks, including U.S. Bancorp and State Street. Further, China’s data shall upset Nifty’s Metals index the most, after its exports fell 14.5% in July from the year-ago period, the biggest decline in more than three years. While local markets have been range-bound in recent trades, FII selling in recent sessions have led to caution amongst the investors. Also, traders don’t want to take any chances ahead of the RBI’s credit policy on Thursday and the central bank’s outlook on inflation and economy for the year.

Important points to note:

Maruti looking good for longs with a low risk opportunity here.
Canara bank another good candidate for longs from current levels, low risk opportunity.
We can expect a small dip on nifty upto 19300-19000 levels also, definitely a good zone there to add longs, for further targets of 20500-21000 levels.

As always, risk management is key, and a proper system in place prevents one from losing out too much, in case of outlier events. Have a good trading day, and may the force be with you!