Finally, the monster rally that brought Nifty from 10700 to 11600 in two sessions has come to a halt, at least for now. Yesterday Nifty closed flat 12 points down from Monday’s close and that means we have to deal with the things the way we were doing till Friday morning, FII selling has resumed again and the worries are back on the table.
Globally the world woke up today to the news of impeachment inquiry of Trump coming from the Senate and that seems to have shaken the Dow, which closed 150 points down last night. NASDAQ was a bigger loser which lost 1.5%. Asia is also in red as trade tensions with China continuing, as Trump called China the main enemy and Iran the epicentre of the global terror. Hong Kong is down more than 250 points and Japan is down 150 points.
Coming to domestics, the triggers are more political than economic that came in from New York. Trump met Imran Khan and had again very indirectly talked about mediating in Kashmir issue if the two nations are comfortable with it. It in a way takes away the sheen out of Howdy Modi rally and brings back the worries again. The meeting between Trump and Modi yesterday night has not yielded much on the trade front as most of it was focused on terrorism and Kashmir.
Technically, the market seems to have made the 11,700 top for this series and now its looking for a bottom. The bottom could be the 100dma which is placed at 11,420 and that is some distance away for now. So for today Nifty might take a support at 11540 levels which is the low point of the trade yesterday.
Coming to derivatives, though Nifty didn’t go up much the action on the Nifty futures was much positive as the premium which was at 7 points in the morning jumped to 25 points by the time the trade closed. Though FIIs were net sellers in the cash market, they bought close to 900 cr in futures keeping the overall long positions at 45%.
On the options front the Nifty put-call ratio has come down to 1.41 from 1.51. 11500 put added 8.8 lakh contracts while 11600 put added 3.9 lakh contracts. 11500 put has the highest open interest for tomorrow’s expiry and its the base now. On the call side 11700 call added 6.5 lakh contracts followed by 11900 call that added 3.4 lakh contracts and 11700 call has the highest open interest on call side indicating a 11500-11700 expiry range for this series.
What is the Nifty call for the day?
Yesterday was more or less a flat day but it did give an opportunity for a long trade at every dip. Today also is going to be the same day as yesterday as global factors might force us to open gap down for the first time this week.
Nifty is likely to open around 11550-11580 range and then 11480-11520 is a very strong support zone that should hold for this series. So, if Nifty holds 11520 mark then I would suggest taking a long position with 11600-11620 as the target. Yesterday’s high of 11640 is resistance and Nifty might halt in the 11620-11640 zone.