India Morning Report: Infosys Bottom, IDFC reverts to upside, why so many shorts?

The day will be a traders’ delight as longs increase their exposure to India in light of the bottoming out of the Economy. The bull run is ofcourse already dreary and tired and most investors would do well to wait and watch. However 5850 levels are unlikely to accede much to the bears than 5800.

RBI decision makes much of the sentiment in the market so there is no good hedge in moving in to non financial sector scrips today. 

As usual the midstream correction/trade creation right in the middle of a real rally because traders are tied up and tired of the stalled markets takes Nifty F&O markets a little independently and with fewer stocks on to higher OI on the upside but in higher naked Call interest than sold Puts of 5800 wwhich are th fundamental backstop of the market right now. Ahead of he rate announcement later in the first half of the day, markets will be keyed up because they finally have a reason to feel vindicated about leading expectations of the rate cut. To understand it more succinctly, with a High risk event such as a RBI announcement, many traders are short but only in spongy/bouncy trades like Tata Global and Idea. But I would go long in OTM calls of the right scrip here if I knew the RBI answers. and I would buy stock, both in IDFC for example is a near failsafe. Or in ICICI Bank. 

Back in Morning report terms, markets are expectant and have been holding RBI to ransom in their own way at each Bank Policy Tuesday and do so today as well, so if there is no rate cut there is likely to be a big beat down. But trades in Jyothy Lab or Orchid Chem suffer at that time while bull chips stay afloat. That is why I am big time circumspect on the HDFC call for a short trade as that is unlikely to materialise, the institution does get hurt by a rate cut as it does not control the overall retail housing market rates but is likely to continue to maintain its spreads/margins and in fact grow them in the current fisc  and is a fundamentally long trade.

The Bull float right now has successfully moved to Tata Motors and Bharti’s trend has much been raided back to likely 290 levels. For me that is just the sure sign of a big move back up from the 5850 bottom. 


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