Corona carnage continues and yesterday also we saw markets giving up further on the 50dma and went below 12100, tested the 12050 levels, went below that but found support at 12020 levels and closed just above 12050 mark. We have the crucial 12000 levels that are protected and now we need to see whether today, the market will regain 50dma or whether we will see selling again after a morning upmove needs to be seen.
Globally, there was a recovery yesterday after 3 days of selling and Dow closed positive along with all the European markets yesterday. Asian markets also have opened in positive territory, except Hong Kong which is 700 points down. This is due to the catch up as Hong Kong opened almost after 5 days of Holiday. Brent crude also has seen some surge and its above 60 dollars trading at 60.4.
On the domestic front, the focus is now slowly shifting towards budget and the Q3 results. Now we are just 3 days away from the budget and this month so far Nifty is down 1% and there is absolutely no pre-budget rally. Are we in for a pre-budget rally that will take us at least to 12300 on the budget day needs to be seen. For this to happen, there has to be some support coming up from Q3 numbers and starting today, till budget some crucial Q3 numbers are coming in, especially from consumption and FMCG sector.
Apart from that, financials like Bajaj Finance and Bajaj Finserv will be declaring their numbers today and SBI, the mother of all banks will be declaring its Q3 on Friday. Also coming up today is Godrej Consumer, Jubilant food works and Pidilite which are FMCG stocks along with Tata power and Ramco cement.
On the derivatives front, yesterday there was selling all across the futures as well as options. Futures market saw a selling off close to 500 Cr and that has brought the overall long positions to 39% and the premium is down to just 7 points. In the options market also there was a huge amount of selling and the Nifty PCR went below 1 mark to 0.99 the lowest level in 2020. This is due to a lot of shorts that got built around calls.
12100 call added 21.3 lakh positions followed by 12150 call that added 7.8 lakh positions and 12050 call that added 7.3 lakh positions. 12200 call has the highest open interest of 56.1 lakh contracts followed by 12500 call with 39.1 lakh contracts. On the put side, there was unwinding everywhere and 12000 put has highest OI with 34.2 lakh positions making it a 12000-12200 range for this expiry.
What is the Nifty call for the day?
The Corona scare ruled the markets yesterday also as we have witnessed a 30% rise in cases on a single day and Nifty broke 12050 mark and went below that. There was some recovery seen since last night due to which the US and Asia showed green signs, today we will open positive around 12050-12080 mark. Will that be sold into or will there be some buying needs to be seen.
If there is selling at 12120 which is the 50dma and bad news on Corona continues then we are on our way to breaking the 12000 mark. But if we don’t get any bad news, then there could be a pre-budget rally and the budget sentiment that will take over. Banking on that, I suggest going long at the open around 12050-12080 mark with 12120-12140 as the possible target.