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The biggest scare is the scare of uncertainty and of unknown. When you know about the things you can plan for them, but when you can’t guess what is coming through and when it will scare you and force you to go for a risk-off mode. The Aramco attack has brought out the vulnerability of Saudi Arabia to the attacks on its oil facilities.

Anyone can strike at any time and there is no way of knowing it. That’s what is making markets vulnerable for a fall. Brent Crude has not cooled off, is trading above 68 and has crossed 68.2 dollars. Global markets are getting into a risk-off mode with Dow losing 150 points and today morning Asian markets have all started off on a nervous note and every market is in red with Hong Kong down more than 200 points and Japan down 50 points.

Coming to domestics, the trade data has come and gone, the third set of reforms by Finance Minister have come and gone but the market seems to treat all this as a non-event. Today Nifty is worried what happens if Brent goes to 80 dollars in the next 2 weeks? Any further escalation in the middle east could cut production and push the oil prices up. We are now on a recovery path slowly and an uncertain situation like this now will not be liked at all by the market.

Technically, we were able to hold on to the 20dma yesterday and Nifty took support near that. Today also the 20dma will be challenged and Nifty has to protect it, otherwise, panic will set in and we can see another collapse of 100 points plus if Nifty is not able to defend the 20dma of 10967. 50 and 200dma now converge at 11200-11220 mark.

On the derivatives front, if Friday is all about longs, yesterday was all about shorts. Suddenly shorts have come back into the system and the overall long positions on Nifty futures fell from 25% to 23% by the time we closed the trade. The Nifty futures premium also dropped from 29 points to just 13 points indicating bearishness. In options, the Nifty put call ratio also dropped from 1.34 to 1.16 mark.

There was a shedding of open interest across puts and 11000 put shed 7.3 lakh contracts and now 10900 put is slowly catching up with 11000 put for the strike with highest open interest. On call side, 11100 call added 9.2 lakh contracts and 11000 call added 8.8 lakh contracts and 11100 now has the highest open interest for this week’s expiry. So, expiry range is 10900-11100 mark.

What is the Nifty call for the day?

Yesterday, markets fell but we recovered a bit and closed just above the 11000 mark. Today we are likely to open at 10980-11000 mark and again we will go to the 10950-10980 band where the crucial 20dma is located. If Nifty takes support there and goes up, then I suggest you to take a long position with 40-50 point as profit target. Yesterday’s high of 11030-11060 will be a resistance which is hard for the Nifty to cross.

But just in case if Nifty falls below 10920-10950 mark then stay away from the market. Even if you have already taken positions, exit them and stay out. We will be going to the lower levels in that case and 10850-10880 might be the mark that we might find support just in case Nifty breaks 10950 mark