As per the above table, it is clear that FIIs have taken fresh long position in Nifty Future Rs. 6643.87 Cr @ 8554.61 Nifty Spot Level in 2015 till 04th Feb 2015. As per the earlier post (http://nifty-analysis.blogspot.in/2015/01/what-fiis-are-doing-in-nifty-future-in.html), FIIs had booked profit in 33% part of their long position (in 2014) from 01st Jan to 07th Jan 2015 but again huge long position has created till 4th Feb 2015. Now, In the year 2014 - Long Position Rs. 9674.37 Cr @ 7402.72 Nifty Spot Level (Still Carrying) In the year 2015 till 04th Feb 2015 - Fresh Long Position Rs. 6643.87 Cr @ 8554.61 Nifty Spot Level. Currently, Nifty Spot is trading @ 8723.70 closed on 04th Feb 2015, if it comes near 8550 - 8650 then it may be buying opportunity. Overall Nifty Spot is not looking below 7980. Please not that FIIs had bought Rs. 3896.76 Cr in Nifty Future on 15th Jan 2015 which is highest buy amount in single day in last 1 year and Nifty Spot was @ 8494.15 on that particular day.
After close observation of the above two tables, it is clear that FIIs had strong Long Position in Nifty Future Rs. 9674.37 Cr. @ 7402.72 Nifty Spot Level in 2014. But Till 07th Jan 2015 FIIs have booked profit in their 33% long position which is Rs. -3214.98 Cr. @ 8309.45 Nifty Spot Level. Currently Nifty Spot is @ 8102.10 as closed on 07th Jan 2015. Means to say FIIs booked +906.73 Points in their 33% long position. As the major concern was Euro zone crisis. Let's have a look on FIIs in Indian Market from Euro zone:
Means to say, if we see on overall basis then France, Germany and Italy are having major exposure in Greece and there are 349 FIIs from 17 countries in Euro zone out of 1754 FIIs from 47 countries. So, it is clear that there 20% FIIs are from Euro zone in India Market and FIIs are from France is 25, from Germany is 17 and from Italy is 8. Major exposure is of Luxembourg - 121 FIIs from this country. Whatever we have seen major selling in cash segment Rs. -1570.76 Cr. on 06th Jan 2015 and Rs. -1073.18 Cr. on 07th Jan 2015 & Selling in Index Futures Rs. -2817.44 Cr on 6th Jan 2015 and Rs. -216.92 Cr. on 07th Jan 2015, it can be from FIIs of France and Germany. If concern from eurozone deeper then we can see more selling in market because Germany and France will be affected on major basis and there 25 FIIs from Germany and 17 FIIs are from France. But it will be buying opportunity becuase if you see from last two days DIIs are buying in cash segment - Rs. +1189.65 Cr on 06th Jan 2015 and Rs. +601.40 Cr. on 07th Jan 2015.
Analysis:- Above tables clearly indicate the FIIs exposure in Nifty Future. There were overall Net Long Position in Nifty Future Rs. 427.80 Cr. @ 5900.49 (Nifty Spot Level). Further, FIIs not only booked profit in overall long position in nifty future but also created fresh short position in Nifty Future: FIIs Overall Net Long Position in Nifty Future on Year Basis in 2013 :- Rs. 427.80 Cr. @ 5900.49 (Nifty Spot Level) FIIs Overall Net Sell Position in Nifty Future in Jan 2014 :- Rs. -5235.65 Cr. @ 6237.79 (Nifty Spot Level) FIIs created Fresh Short Position in Nifty Future in Jan 2014 = Rs. 427.80 Cr. (Overall Net Long Position in Nifty Future in 2013) -5235.65 Cr. (Overall Net Sell Position in Nifty Future in Jan 2014) = Rs. -4807.85 Cr. @ 6237.79 (Nifty Spot Level Basis). But in coming months (Feb, March, April, and May 2014), FIIs not only covered their short positions but also created Fresh Long Position in Nifty Future. Feb-14 :- Rs. +1762.60 Cr. @ 6096.81 (Nifty Spot Level Mar-14 :- Rs. +6472.64 Cr. @ 6504.56 (Nifty Spot Level) Apr-14 :- Rs. +152.76 Cr. @ 6750.23 (Nifty Spot Level) May-14 :- Rs. +2329.53 Cr. @ 7067.62 (Nifty Spot Level) Total Buy Position from Feb-14 to May-14 = 1762.60 + 6472.64 + 152.76 + 2329.53 = +10717.53 Cr. @ 6604.80 (Nifty Spot Level) Total Fresh Long Position in Nifty Future till May-14 = +10717.53 Cr. (Total Buy Position from Feb-14 to May-14) - 4807.85 Cr. (Fresh Short Position in Nifty Future Till Jan 2014) = +5909.68 Cr. @ 6421.29 (Nifty Spot Level). After that FIIs booked some profit in June-14 in their long position which was Rs. +5909.68 Cr. @ 6421.29 (Nifty Spot Level) in May-14 :- Rs. -2421.16 Cr. @ 7544.34 (Nifty Spot Level). Means FIIs booked profit +1123.05 Points in their long position. Now balance Long Position was Rs. +3488.52 Cr. @ 6421.29 (Nifty Spot Level) in June-14. Further, FIIs again created Fresh Long Position in Nifty Future in July & Aug-14 :- July-14:- Rs. +322.83 Cr. @ 7676.75 (Nifty Spot Level) Aug-14:- Rs. +1337.45 Cr. @ 7760.69 (Nifty Spot Level) So, Total Long Position till Aug-14 :- Balance Long Position till June-14 = +3488.58 Cr. @ 6421.29 (Nifty Spot Level) July-14 = Rs. +322.83 Cr. @ 7676.75 (Nifty Spot Level) Aug-14 = Rs. +1337.45 Cr. @ 7760.69 (Nifty Spot Level) Total Long Position in Nifty Future Till Aug-14 = 3488.58 + 322.83 + 1337.45 = 5148.86 Cr. @ 7286.24 (Nifty Spot Level). Again FIIs booked some profit (+758.21 Points) in their long position in Sep-14:- Rs. -3122.88 Cr. @ 8044.45 (Nifty Spot Level). Now balance Long Position in Nifty Future till Sep-14 :- Rs. +2025.98 Cr. @ 7286.24 (Nifty Spot Level). And again FIIs created major Fresh Long Position in Nifty Future in Oct & Nov-14 = Oct-14 :- Rs. +7127.04 Cr. @ 7918.25 (Nifty Spot Level) Nov-14 :- Rs. +3936.22 Cr. @ 8415.97 (Nifty Spot Level) Now, Total Long Position in Nifty Future till Nov-14 = Balance Long Position till Sep-14 = Rs. +2025.98 Cr. @ 7286.24 (Nifty Spot Level) Oct-14 :- Rs. +7127.04 Cr. @ 7918.25 (Nifty Spot Level) Nov-14 :- Rs. +3936.22 Cr. @ 8415.97 (Nifty Spot Level) Total Long Position in Nifty Future till Nov-14 = Rs. +13089.24 Cr. @ 7873.33 (Nifty Spot Level Basis). But further in Dec-14 (till 24th Dec 2014), FIIs booked (450.01 Points) again some profit in their long position Rs. -4694.01 Cr. @ 8323.34 (Nifty Spot Level). Conclusion :- Now, Finally Balance Long Position of FIIs in Nifty Future till 24th Dec 2014 :- Rs. 8395.23 Cr. @ 7403.98 (Nifty Spot Level Basis). Presently Nifty Spot is trading at 8174.10 (Closed on 24th Dec 2014). First Major Support in Nifty Spot will be @ 7850 because FIIs had taken major fresh long position in Nifty Future Rs. 7127.04 Cr. @ 7918.25 (Nifty Spot Level Basis) in Oct-14 which was highest long position amount on month basis in 2014. If market will come down to these levels then it may be buying opportunity and overall market is not looking below 7400 (Nifty Spot Level).
Alert:- Short Nifty Future July Expiry @ 7784 - 7800, Stop Loss @ 7860, Target @ 7575 - 7400.
Alert :- FIIs have already pumped huge cash in Nifty Future. Now its time book profit by FIIs. In Index Future :- +38371 Cr till date 2014 In Spot :- +71109 Cr till date 2014 Note :- FIIs have already sold -23693 Cr till date 2014 in Stock Futures.
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10 Laws of Stock Market Bubbles:- 1. Debt is cheap. 2. Debt is plentiful. 3. There is the egregious use of debt. 4. A new marginal (and sizeable) buyer of an asset class appears. 5. After a sustained advance in an asset class’s price, the prior four factors lead to new-era thinking that cycles have been eradicated/eliminated and that a long boom in value lies ahead. 6. The distance of valuations from earnings is directly proportional to the degree of bubbliness. 7. The newer the valuation methodology in vogue the greater the degree of bubbliness. 8. Bad valuation methodologies drive out good valuation methodologies. 9. When everyone thinks central bankers, money managers, corporate managers, politicians or any other group are the smartest guys in the room, you are in a bubble. 10.Rapid growth of a new financial product that is not understood. (e.g., derivatives, what Warren Buffett termed “financial weapons of mass destruction”).
It’s well-known that the U.S. stock market breached all-time record levels repeatedly in recent months. But what about the rest of the world? According to new data from the World Federation of Exchanges (WFE), the combined market cap of the world’s major stock markets hit an all-time high in November. We first read about this on Professor Mark Perry’s Carpe Diem blog. Here’s Perry: As of the end of November, the total value of equities in those 58 major stock markets reached $63.4 trillion and set several milestones. First, global equity value reached a new all-time record high in November, and second, exceeded for the first time the previous all-time record monthly high of $62.8 trillion for global equity valuation in October 2007, several months before the global economic slowdown and financial crisis started, and caused global equity values to plummet by more than 50% (and by almost $34 trillion), from $62.8 trillion at the end of 2007 to only $29.1 trillion by early 2009…
China’s economy has slowed down again in the final months of the year, according to analysts at London consultancy Capital Economics. And growth may be back to where it was before the Beijing government caused activity to rebound over the summer with a new round of GDP-boosting stimulus measures. Official statistics will show that the economy expanded around 7.5 per cent, year on year, in the final three months of 2013, Capital Economics predicts. That is the same rate of growth recorded for the three months to June, and is below the 7.8 per cent expansion seen in the third quarter. Capital Economics’ forecast is based on its “China Activity Proxy”, which is made up of data that tracks economic activity such as travel, property sales and the volume of goods being shipped across the country. Here is what the group sees is happening: Cargo moving through China’s seaports is “unusually slow”. Growth in the number of passengers travelling by road, rail water and air is “close to a multi-year low”. Construction accelerated in November, but developers’ unsold inventory is rising so housebuilding should slow down. On the plus side, demand from overseas “looks to have held up relatively well”. Capital Economics also says its “China Activity Proxy” has since 2012 “signalled that growth has been 1-2 percentage points slower than the official GDP figures”. Below is a chart of how the proxy has predicted changes in China’s GDP figures.
