Market Setup

A very calm day yesterday but if you look deep inside, NIFTY futures premium went up 4 rupees from 24 to 28. The long vs short ratio of NIFTY futures stand at 34:32. That means 32 short contracts for every 34 long contracts. That has slightly pushed up the premium.
The data in the options market also suggest a slight bullishness. The put selling started at 10,000 now and most of the volume got generated here. The 9900 put also is very active and a 50 rupee premium over there indicates 9850 is a firm support for now. NIFTY is at 9988. The shorting started at 10,100 call and that has the 2nd highest volume on call side. The highest volume however is at 10,000 call that has a premium of 90 rupees. That actually give me a hint that there is a short straddle being built at 10,000 call and put.
The combined premium is around 170 rupees and that can give you the profit if the NIFTY expires above 10,020 and below 10,090. So somewhere the smart money is looking at a expiry between 10,000 and 10,100 for October series. The NIFTY Put call ratio is also flat at 1.38 vs 1.37 at the beginning indicating that puts and calls were equally in demand.

What is the strategy for today?

I am expecting a flat start to NIFTY below 10,000 and what happens next is to be watched 10,030 presents a strong resistance upside and NIFTY might be in a very narrow range today between 9980 and 10,030 and might close in this region only. Keep the long position taken around 9960 range yesterday for a revised target of 10,050 to be achieved this week itself. The results season is starting and am sure the IndusInd bank on 12th Oct will take NIFTY to new heights if not achieved before. So wait watch!!

Q2 Corner

Today we are starting the Q2 with South Indian bank coming with their results. Here is the expectations on the result.
The NII is expected to be above 2.4% in growth and slippages should be below 200 Cr. The NPA upper limit is 3.6% and loan growth is seen at 11%. The stock went up 1.5% yesterday and that means something is smelt by the traders.