Start of the 4th week of August happens on a high note. Globally things are looking much calmer than what they were a week ago. The Dollar index is coming down and that puts to rest the fears of Rupee touching 71 per dollar. Today we might see Rupee trying to move back to below 70 levels which is a major psychological positive. Brent Crude is also below 72 dollars at 71.6 and that will be positive for India. Dow Jones closed positive on Friday with a gains of 110 points and Asia is in green today with all Asian markets except Japan in green and Hong Kong market is up more than 300 points.
Coming to domestics, there is a lot of positivity as we are sure of seeing 11500 on Nifty today. Crude is below 72 dollars and Rupee is not going beyond what it has gone on Friday so all this means we will have some positivity. The market rally this month has been broad based with every sector except Automobile sector seeing a growth of 2% or more. The only negative factor is the widening trade deficit but looks like market seem to have digested it. Today it will be global positivity that might drive the markets.
The cues coming from derivatives also seem to be suggesting the same trend. On Friday Nifty Futures has seen some selling and the Nifty long positions have come down to 52% but there is a lot of bullish activity seen in options markets. As the expiry day is nearing we are seeing the demand increasing for long calls and short puts indicating that market is seeing the possibility of a 11600 in this series. 11400 put sae 9.3 lakh contracts while 11500 put saw 6.4 lakh contracts building. On the call side 11600 call sae 4.3 lakh contracts and 11800 call saw 2 lakh contracts build up. The Nifty put call ratio as a result has jumped to 1.66 from 1.60 seen at the beginning of Friday.
What is the Nifty call for the day?
A green Asia means we will have a positive opening above 11500 which is going to be another all time high for Nifty and now its difficult to predict what is the resistance. The options market indicates 11530-11550 is a resistance zone for the day and on the down side it might go to 11480 levels. So, its better to wait and watch today as buying above 11500 is never a great idea as the expiry is not very far. Plus market is shut on Wednesday for Bakr-Eid and that break also might reverse the direction. so for me, today is another wait and watch day, as your portfolios are gaining some value that they have lost in last few months.