Weekend is here and we are sitting on a one more record closing for nifty. But today is a different day with different cues. Dow Jones continue to consolidate with a 70 plus point closing in red while NASDAQ continue to go up, though marginally but its still going up. Its mainly due to Amazon which has reached another record high. Today Amazon is doing what Apple did a decade ago. Asia however is mixed on the back of trade tensions with China and not so positive cues have left Asian markets directionless.
On the domestic front, yesterday BJP won a prestige battle against Congress and more importantly the opposition unity against Modi is in shatters, and that means 2019 is not as tough as it was imagined before. The other big news is coming from Brent Crude, with Iraq decreasing the selling price for Asian countries and that pushed Brent Crude closer to 72 dollars now and for sometime went below that. The effect of Q1 is now waning and today is important because SBI, mother of all banks is coming up with its Q1 by mid day and that could set the agenda for today. On the negative side dollar index is on the verge of making a yearly high by crossing the 95.6 mark and will that take Rupee back to 69 is something we need to see.
On the derivatives front, there was some selling in Futures market that was observed and the overall long positions in the market for Nifty futures stand at 57%. On the options front, the put call ratio surged to over heated levels of 1.80 from 1.77 and this is now going to be a big factor in determining the direction of the market. 11400 put added 7 lakh contracts and at 80 rupee premium it offer a strong support at 11320. 11500 put added 3.2 lakh contracts and 11300 put added 2.9 lakh contracts. On the call side 11900 call added maximum positions of 1.8 lakh contracts 11700 call added 1.6 lakh contracts, 11600 call added 1.1 lakh contracts and 12000 call added 1 lakh contracts.
What is the Nifty call for the day?
There are many factors that need to be taken in to account. FIIs buying in cash market will push Nifty up but selling in Futures market will pull it down. The put call ratio is at 1.8 which means making money by shorting put, which is a mildly bullish strategy is very easy, and in markets nothing is easy. So, what if from mildly bullish, market turns mildly bearish till PCR gets adjusted? Asia is not supporting the bulls and its a weekend so we just cannot rule out a fall. What can stop a big fall is the dropping crude which is good for India and domestic fundamentals that are looking positive.
From the point of view of all scenarios we can say that Nifty might open around 11470-11480 levels and might flirt with 11500 for go very near to it. That might trigger a sell in Futures market and that might take Nifty to 11450-11420 levels where it might find some support. The big support zone is 11380-11400 and Nifty today might not take that out. So I suggest going short at the opening time above 11470 with 11400-11410 as the target to be achieved today. Exit positions even for 30-40 points profit if the fall is not happening. Go to the next week on a clean slate.