As we arrive on another weekly expiry, neither there is an excitement nor the inclination to even look at the volumes or the turnover. Things are looking really bad and 8555 which everyone thought will hold was taken out in the last hour and Nifty effortlessly went below 8500 to test 8400 levels before closing at 8470 levels. Not only in India, but volatility also dominated even the US markets, where Dow Jones fell 1300 plus points, erasing all the gains it made the day before yesterday.
Now Dow Jones is below the 20000 mark and now the whole Trump rally seems to be disappearing and Dow might come to 19100 mark, from where Trump rally in 2016 started. Dow Jones is now 19900. Asian markets are trading lower with Hong Kong down 900 points and Brent Crude has added a dollar and is trading at 26 dollars now.
On the domestic front, there seems to be no good news coming from anywhere and 2008 seem to be repeating. In January 2008 when fall started it lost 30% in a month and now we lost 26% in one month time period mirroring the fall we saw then. If we look at 2008 as a year it fell almost 60% and if we take the same correlation then Nifty might come to 5000 levels.
There is a much talked about support at 8000-8100 mark and if that doesn’t hold then 6300 from where Modi rally in 2014 has started will be the next support and after that, a 60% correction to 5000 will be inevitable. Prime Minister Modi will be addressing the nation at 8 PM today and much will depend on what he says and also whether India will move into Stage III or might escape that or delay that. As of now, things look grim with nearly 160 cases and 3 deaths.
On the derivatives front, yesterday was a bad day in the derivatives market as there was selling seen both in Futures as well as in Options. The volumes in Futures were very low, indicating that most traders prefer sitting in the sidelines than to trade. The Nifty futures long positions adjusted to 34% from 36% and in the options market the Nifty put call ratio corrected to 0.96 from 1.03.
On the call side, 10000 call still has the highest open interest for today’s expiry followed by 9000 and 9500 call but all of them look meaningless as Nifty is moving towards 8000 mark. On the put side, 8100 put has the highest open interest followed by 8000 put and then 8500 put. So for today’s expiry, the support will first come at 8100 mark followed by 8000 and if Nifty goes past 8500 then it could become the support.
What is the Nifty call for the day?
As told before, and as I keep repeating every day, there is no point in predicting the opening levels in these times of volatility but going by SGX Nifty we can have an open between 8100-8400 mark and 8100 is the support. If that breaks no one knows where it goes and on the upside also there is no guarantee for the Nifty.
So, I suggest you not to trade and lose money by being on the wrong side. Today is the weekly expiry so, expect more volatility and see if we will protect the 8000 mark or not.