Dalal Street Week Ahead: SEPTEMBER 4TH Week | 2024 | P R Sundar

Summary

In the DAL Street Week Ahead program, PR Sundar discusses market trends, noting that recent rallies have been concentrated on Fridays, causing losses for intraday traders. He advises caution on Fridays but sees opportunities for positional traders, with the market bullish between 25,000 and 26,000. Technical analysis has been accurate, with Nifty and Bank Nifty showing significant rallies after crossing certain levels. Sundar anticipates a consolidation for Nifty between 25,500 and 26,000, with increased volatility due to the options expiry. He suggests that despite potential market fluctuations, selling put options below 25,000 could be profitable, and considers 25,000 as a support level for October, barring unforeseen events.

Takeaways

• 📈 Markets rallied about 2% last week, with most of the rally happening on Friday, indicating a strong trend on that day.
• 🔍 The speaker advises caution on Fridays, as many intraday traders have lost significant amounts of money recently.
• 📉 The speaker has been recommending a bullish stance, suggesting that dips towards 25,000 are opportunities to add more positions.
• 📊 Technical analysis has been accurate, with Nifty and Bank Nifty showing significant rallies after crossing certain thresholds.
• 🚀 Bank Nifty has surged more than 2,000 points in six trading sessions, reflecting a shift in market trends post-Fed rate cut.
• 💹 The speaker anticipates Nifty to trade between 25,500 and 26,000 in the coming week, due to market consolidation.
• 📊 Open interest in options is high, with 26,000 call options and 25,700 put options attracting significant attention.
• 🌪️ Expectations of market volatility are high, especially in the last week of the expiry, influenced by the Global Market Assessment (GMA) effect.
• 📅 The upcoming week is expected to be eventful with potential market movements of 250 to 300 points over four trading sessions.
• 🏛️ The speaker mentions upcoming events like state elections in October that may influence market behavior.

Q & A

What was the market performance last week as mentioned in the script?

Last week, the markets rallied about 2%, with most of the rally occurring on the last Friday.

Why are Fridays considered a trending day for the Nifty index in the past two to three months?

In the past two and a half months, out of five trading sessions where the Nifty rallied more than 300 points, four of those trading sessions happened on Fridays.

What advice was given to intraday traders regarding trading on Fridays?

Intraday traders are advised to be very careful on Fridays as many have lost significant amounts of money, and it's suggested that it might be better to avoid trading on Fridays.

What has been the stance on the market for positional traders according to the script?

Positional traders have been advised that the market is bullish and any fall towards 25,000 is an opportunity to add more put positions at 25,000.

What technical analysis was mentioned regarding the Nifty index crossing 24975?

The script mentioned that when the Nifty index crossed 24975, it was a signal to go long, which was followed by a rally of more than 800 points.

What was the significance of the Bank Nifty crossing 21840 as per the script?

Crossing 21840 for Bank Nifty was a signal to go long, and within six to seven trading sessions, it shot up more than 2,000 points.

How does the script describe the overall market sentiment post the US Fed rate cut?

The script describes the market as very bullish post the US Fed rate cut, with a shift in focus from defensive sectors to cyclical sectors.

What is the expected trading range for the Nifty index in the coming week according to the script?

The script expects the Nifty index to trade between 25500 and 26,000 in the coming week.

What is the expected market behavior during the last week of the expiry as per the script?

The script expects the market to be very volatile during the last week of the expiry, with the GMA effect kicking in and the potential for the Nifty to move about 250 to 300 points.

What are the potential events in October that could impact the market as mentioned in the script?

The script mentions that state elections in Kashmir and Haryana in October might cause some market reaction.

What is the view on market consolidation and opportunities for option sellers as per the script?

The script suggests that the market will consolidate with a positive bias, and any intraday fall is an opportunity to sell more put options at 25,000 and below.

Outlines

00:00

📈 Market Analysis and Trading Strategy

In the video script, PR Sund discusses the recent market rally, noting that the Nifty index has seen significant gains, particularly on Fridays over the past few months. He warns intraday traders about the risks of trading on Fridays, citing instances of substantial losses. For position traders, he advises that the market is bullish and that dips towards 25,000 points should be seen as opportunities to add more positions. He also discusses his successful technical analysis predictions, such as the Nifty going long after crossing 24,975 points and the Bank Nifty going long after crossing 21,840 points. He anticipates a consolidation phase for the Nifty, suggesting it will trade between 25,500 and 26,000 points. He also mentions the impact of the Fed rate cut on market sectors, particularly cyclical stocks, and the significant inflow of funds into the market.

05:01

🔍 Market Volatility and Future Predictions

The second paragraph focuses on the expected market volatility, especially in the last week of the expiry series. PR Sund anticipates that the Nifty will experience significant movement, possibly between 250 to 300 points over four trading sessions. He discusses the potential impact of options trading, suggesting that even a 200-point move could benefit option sellers due to time value. He also touches on the upcoming economic data releases and their potential influence on the market, but notes that the market may be less responsive to data due to the recent Fed rate cut. He concludes by suggesting that the market will likely consolidate with a positive bias and that any intraday falls could be an opportunity to sell more put options. He also briefly mentions upcoming events in October that could affect market sentiment.

Keywords

💡Rally

A rally in financial markets refers to a sustained rise in prices or indices. In the context of the video, the speaker mentions a market rally of about 2%, highlighting the significant increase in the Nifty index, which is a key stock market index in India. The rally is particularly noted to have occurred on Fridays, indicating a pattern that traders and investors might want to pay attention to.

💡Nifty

Nifty is the National Stock Exchange of India's benchmark index, which includes 50 of the largest and most liquid Indian companies listed on the NSE. It is used as a barometer for the Indian stock market. The video discusses the Nifty's performance, particularly its rallies and the importance of specific levels like 25,000 and 26,000 for traders and investors.

💡Intraday Traders

Intraday traders are individuals who buy and sell securities within a single trading day, aiming to profit from short-term price movements. The video warns that intraday traders have lost significant amounts of money on Fridays, suggesting that the volatility on these days can be particularly risky for this trading strategy.

💡Positional Traders

Positional traders are those who hold their positions in securities for a longer duration, often days, weeks, or months, in anticipation of a trend. The video suggests that positional traders are benefiting from the bullish market, as they have been advised to add more positions when the market falls towards certain levels.

💡Technical Analysis

Technical analysis is a method used by traders to forecast the direction of prices through the study of historical market data, primarily price and volume. The video references technical analysis as a tool that has been performing well, with specific mentions of Nifty and Bank Nifty crossing certain levels as signals for long positions.

💡Bank Nifty

Bank Nifty is an index that comprises of the 12 leading Indian public sector banks. It is a significant index for the banking sector in India. The video highlights the performance of Bank Nifty, noting a significant rally after a certain level was crossed, indicating a shift in market sentiment towards cyclical sectors post the Fed rate cut.

💡Fed Rate Cut

A Fed rate cut refers to a reduction in interest rates by the Federal Reserve in the United States. The video discusses how the Fed's rate cut has impacted various sectors, particularly cyclical ones like banking, leading to a significant rally in indices like Bank Nifty.

💡Open Interest

Open interest in options trading refers to the total number of outstanding contracts that have not been settled. The video mentions the highest open interest at certain strike prices, which can influence market movements as traders react to these levels, potentially leading to volatility.

💡Volatility

Volatility in finance refers to the degree of variation in the price of a security or index over time. The video anticipates increased volatility in the market, particularly in the last week of the expiry of options, which can lead to larger price swings and potential opportunities for traders.

💡Option Sellers

Option sellers are traders who sell options contracts, expecting to profit from the premium received if the option is not exercised. The video suggests that even if the Nifty moves higher, option sellers can still make money due to the time value of options, indicating a strategy that can be employed in volatile markets.

💡Consolidation

Consolidation in financial markets refers to a period where an asset's price remains relatively stable after a significant price movement. The video expects the Nifty to consolidate after recent rallies, suggesting a period of stability or minor price fluctuations as the market digests recent gains.

Highlights

Markets rallied about 2% last week, with most of the rally coming on Friday.

Nifty has rallied on five trading sessions more than 300 points in the past two and a half months, with four of those sessions being on Fridays.

Fridays have been trending days for the market in the last two to three months.

Intraday traders have lost significant amounts of money on Fridays, with some losing 2-5% of their capital.

Positional traders are benefiting as markets have been bullish, with 25,000 to 26,000 being the range mentioned.

Technical analysis has been accurate, with Nifty going long after crossing 24975, leading to an 800-point rally.

Bank Nifty also went long after crossing 21840, resulting in a 2,000-point increase in six to seven trading sessions.

The market is very bullish, and the rally is causing concern among analysts.

Nifty 26,000 is less than 1% away and could be reached at any time.

Highest open interest on the downside or upside will be taken out to scare option writers.

Defensive sectors like FMCG and Pharma were doing well until the Fed rate cut, after which cyclical sectors may pick up.

Bank Nifty's rise of 2,000 points in six trading sessions reflects a shift in market dynamics post-Fed rate cut.

FII pumped in 14,000 CR when the market and Bank Nifty hit all-time highs.

Nifty is expected to trade between 25500 and 26,000 in the coming week, with consolidation after recent rallies.

The market is expected to be very volatile in the last week of the expiry due to the GMA effect.

Nifty could move about 250 to 300 points in the next four trading sessions, with volatility affecting both upside and downside.

The upcoming series is a 5-week series, and September has been very volatile due to the US Fed rate cut.

There are no more important news events, and people will focus more on positioning in F&O rather than data.

US GDP data is upcoming, but the market may not worry much about it due to the Fed's rate cut indications.

Manufacturing and PMI data are not significant concerns for India, which is not a data-dependent market.

The market is expected to consolidate with a positive bias, and any intraday fall is an opportunity to sell more put options below 25,000.

For the month of October, 25,000 should be a support, but there are events like state elections that might cause fluctuations.

Transcripts

this is PR Sund welcome to DAL stre week

ahead program sponsored by delta.

exchange last week markets rallied about

2% but most of the rally came on last

Friday in the last few months if You

observe in the past like maybe two and a

half months Nifty rallied on five

trading sessions more than 300

points out of this five trading session

four trading session happen on Friday

the Friday is a very very trending day

for the last two to three months the one

has to be very very careful even Friday

morning in pre-market I mentioned that

Fridays you know you have to be very

very careful and look at the last Friday

many many intraday Traders have lost

heavy amount of money right and I know

some people have lost even 2% 3% 5% of

their Capital so at least you know for

intraday Traders it's better to avoid

trading on

Fridays uh but positional Traders are

very happy because you know since the

beginning of this month I've been saying

that 25,000 to 26,000 is the range and

I've been saying that markets are

bullish and any fall towards 25,000 is

an opport opportunity to add more put

positions at

25,000 and that is working out very very

well not only that even the technical

analysis has been doing very well this

time if you can remember I told you

Nifty is long when 24975 was crossed and

then now you see it's a more than 800

Point rally the same thing uh I last to

Last Friday uh I mentioned that

the bank Nifty is long when 21840 is

crossed and now see within six seven

trading sessions Bank Nifty has shot up

more than 2,000

points so markets are very very bullish

there is no doubt about it and in fact

this kind of rally is worrying the

analyst most of the analysts I met I

talk you know so they're very very

cautious in fact I've also been very

very cautious

shares so now Nifty 26,000 is just less

than 1% away it can go anytime if I'm

not wrong you know uh once in few months

the highest open interest on the

downside or highest open interest on the

upside will be taken out to scare the

option

wrers so since the beginning of this

month 25,000 put and 26,000 call they

both had the highest open interest they

have scattered 25,000 fo you know in

between the market men to

24800 and now who knows they may scare

the people who are selling the call

option at

26,000 but we still have four more

trading

sessions now particularly this time one

big change you know until last week or

we can say before the Fed rate uh cut

the defenses were doing well

it was doing well fmcg was doing well

and Pharma was doing well but now after

the Fed rate cut the probably the

cyclical May pick up so that is what

reflected from the bank Nifty and

shooting up 2,000 point in six trading

sessions and then f are pumping in

14,000 CR when the market is at alltime

high and the bank Nifty hits alltime

high right so that's how F behave

so uh if you look at this week the

coming week I do expect Nifty to trade

between 25500 and

26,000 uh maybe it's a very small range

uh the reason is that you know in the

last two weeks Nifty has already rallied

on two trading sessions one trading

session about uh 400 Point another

trading session about 300 plus points so

logically at least for next few trading

s

Nifty will have to

consolidate so that is the reason why

I'm

expecting 25500 on the downside and

26,000 on the high side and moreover if

you look at the

options 26,000 call option still has the

highest open interest but on the

downside because the rally was so

powerful on Friday uh even 25700 put

option added huge open interest so 25700

25600 25500 all you know but you can't

take this as The Benchmark you know

probably those people would have sold

call options earlier say for example

somebody was sold 25 800 call option by

thinking that'll be the resistance now

Market is going to 25800 so they might

be selling more put options aggressively

so that you know uh that break even will

be

better so otherwise you know 25500 to

26,000 should be the reasonable range

for the coming week last week of the

expiry so definitely the markets will be

very very volatile the GMA effect will

be kicking in and you know usually you

know if the markets are very very

volatile the last week will be even more

volatile so I expect Nifty to move about

250 to 300 points in the next 400 four

trading sessions but we don't know

whether it is on the upside or down side

or it can be both sides also so anyway

so let us see but even if it moves 200

Point higher you know uh the time value

will help option sellers to make some

money so anyway so next series is going

to be more interesting because it's a 5

we series and luckily the September is a

4 we series and very very volatile

series but it was a huge rally because

of the US Fed rate cut

so there are no more important uh news

because these are last week people will

be focusing more on positioning in fendo

rather than the data but US GDP data is

there so but now because the FED has

already cut the rate 50 basis point and

already indicated another 50 basis point

cut by the end of this calendar year so

the people may not worry too much about

that uh uh uh GTP data also so here you

know some manufacturing pay my data I

know like India is not a data dependent

market so there's nothing to worry much

about it so let us see whether the

market consolidates so my view is that

market will consolidate with a positive

bias in case if any intraday uh fall

that is an opportunity to sell more put

options 25,000 and Below uh now I feel

that even for the month of October

25,000 should be a support but there are

a few events in October like you know

Kashmir and harana state elections you

know there might be some nature

creaction so that we will see later so

we will pass this xer first so that's it

for now hope you enjoyed watching this

video thank you for watching