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Market Trade Setup 10th June

The second week of June starts on a bright note with Trump tweets putting an end to the Mexico tax tariffs, for the time being, gave a push to the US markets and they ended around 260 points. Added to that is the US jobs data which came in slightly negative and that has further raised the hopes on the rate cut and that is going to add to positivity.

Asian markets have opened on green and all of them are trading in huge gains. Hong Kong is up more than 500 points, Japan and Taiwan is up 200 points and 100 points respectively. Brent crude also started its upward journey and crossed 63 dollars and trading at 63.3 dollars. 

On the domestic front, the focus is now slowly shifting on budget and the pains in NBFCs. DHFL should put the worries back in the place that nothing has changed much in India and RBI has to step in and do something about NBFCs. On the budget front, there is a talk that the tax bracket is going to be raised on LTCG and market might not like that.

There are also worries about how much the more agricultural sector is going to be given in the budget. One more worry is delayed monsoon which might get further delayed due to a low-pressure system that is likely to develop in the Arabian sea. So, again its global positives vs domestic worries for Nifty today. 

On the derivatives front, Friday saw some good buying in the afternoon as Nifty recovered almost 100 points from the lows we have seen on Friday. The Nifty futures long positions which were at 56% went up to 59% and even on the options market also there were more long calls purchased and short calls sold and that brought Nifty put-call ratio to 1.32 from 1.36.

For 13th June expiry 11800 put has the maximum interest as it added 8.6 lakh positions in open interest. On the call side, 12000 call has the highest open interest as it added 4.1 lakh positions. 11900 call also added 4.4 lakh positions and 12050 call added 4.5 lakh positions, most of them longs to make some quick profits. 

What is the Nifty call for the day?

Today is going to be the battle between the positive global factors and domestic worries like DHFL, budget, monsoon etc. To start with, Nifty will open at 11900-11930 levels and it would take Nifty to resistance zone of 11920-11950 and upside will be possible only if Nifty crosses that level. On the downside, 11820-11850 will act as a support and we might be in that range of 11820-11980 today.

You have long positions taken around 11900-11920 mark and you might want to exit those positions if Nifty breaks 11950 mark anytime today. We need to see if Nifty can go beyond 11950 towards 12000 and if it does then we might look at a 12100-12200 expiry for this week. So, for today wait for your positions to come into decent profit and exit and wait for the right opportunity to re-enter again.