Anil Singhvi's Market Strategy June 6: Markets neutral, RBI policy impact awaited; Tata Motors is stock of the day
Amid positive Domestic Institutional Investors (DIIs), neutral global, future and options (F&O), negative foreign institutional investors (FII) plus weak sentiment is signalling that the short term trend of the domestic market is going to be neutral on Wednesday, .i.e. on June 6, 2018.
Ahead of the Reserve Bank of India's (RBI's) second monetary policy review 2018-19 on June 6, 2018, the Indian markets, Nifty and BankNifty ended lower on Tuesday. Nifty and BankNifty closed slightly low by 35.35 points at 10,593 and 6.55 points at 26,251 respectively.
But amid positive Domestic Institutional Investors (DIIs), neutral global, future and options (F&O), negative foreign institutional investors (FII) plus weak sentiment is signalling that the short term trend of the domestic market is going to be neutral on Wednesday, .i.e. on June 6, 2018.
Impact of RBI Policy on markets
Scenario 1: No rate hike and positive commentary:
Markets will see short covering. Nifty and BankNifty can recover up to 10,700 and 26,650 at least.
Scenario 2: No rate hike and neutral commentary:
Markets to see some short covering. Nifty and BankNifty may recover up to 10,650-10,675 and 26,350-26,500.
Scenario 3: No rate hike and Negative commentary:
Nifty and BankNifty to fall up to 10,500 and 26,000 then short covering is expected.
Scenario 4: Rate hike and neutral commentary:
Nifty and BankNifty to fall more near 10,500 and 26,000 at least. Fall could be more and sharp.
Scenario 5: Rate hike and negative commentary:
Nifty and BankNifty to fall more to 10,400 and 25,700. After that, it could see some short covering.
Pre Policy Analysis:
- No sizable recovery expected before policy as huge sell-off in cash stocks is a big worry.
- Nifty and BankNifty turned into premium from huge discount.
- Notably, the huge discount in Nifty and BankNifty has turned up to be premium.
Zee Business's Managing Editor Anil Singhvi's Market Strategy for June 6:
10,600 and 26,300 are going to be a deciding level in Nifty and BankNifty.
10,550-10,650 is going to be a trading range for traders on Nifty but if it crosses the two marks then the traders can see an additional move of 50 points.
But if Nifty goes below the mark of 10,550 then it can be treated as the first hint of weakness in the market.
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26,000 to 26,500 is going to be a trading range in case of Bank Nifty. Any movement above the two marks means there can be an additional movement of 150 points on the chart.
Anil Singhvi suggests that traders should reduce their buying positions on Nifty and BankNifty if it closes below the mark of 10,600 and 26,600 respectively.
Sell and Buy Strategy for Nifty
Sell Nifty with a stop loss at 10,650 and target of 10,550.
Buy Nifty below 10,550 with a stop loss of 10,500 and target of 10,600.
Sell and Buy Strategy for BankNifty
Sell BankNifty with a stop loss at 26,500 and Target of 26,200-26,100
Buy BankNifty near 26,100 with a stop loss of 25,600 and target of 26,200-26,250.
The put-call ratio (PCR) for June 6 stands at 1.33 and volatility index (VIX) is 13.31.
Enter F&O ban list: DHFL
Stock of the day: Tata Motors