Market Setup

Yesterday postnoon fall in NIFTY is on account of fundamental fears on the state of economy. At a higher levels there is no buying happening and people are selling off their profits. That’s why I advised to sell at 10050-10060 levels and take profits. Risky trade however is to revise the targets to 10080.Those who booked profits might have pocketed the profits and those who revised the targets to 10080 need to wait because NIFTY is now 100 points away from that.

Quarter 2 Earnings

Today is going to be a strong fundamental day with IndusInd and TCS coming up with the results.
The banking and IT sector will open up with this and we need to see how things pan out here. IndusInd will come with their results around midday before lunch and TCS after the closing of the market. So, today’s post noon reaction will be on how IndusInd come up.

Macros

 Also on macro front we have the IIP and CPI inflation figures coming in the evening. The IIP for the month of August is expected to come at 2% and last month it was just 1.2%. The CPI inflation for September is likely to go up marginally to 3.6% vs 3.4% seen in August. This is also adding to the first half tax revenues which came at 5.2% higher than previous year same period, indicating a higher revenue. All this will go in keeping the fiscal deficit target of 3.2% which still looks very difficult.

So what is the trade today?

Yesterday’s trade data suggests that there was a massive selling that happened in NIFTY futures market where the premium came down from 19 points at the start of the day to just 4 rupees. If you read my market set up yesterday you will get a hint of it when the premiums started falling though the NIFTY was rising. The options market also is constant between bulls and bears and Nifty put call ratio is at 1.38 vs 1.39 seen previously.
For today NIFTY might open above 10000 and what happens after that needs to be seen. Yesterday’s range will more or less be followed here NIFTY has the legs to touch 10050 if  IndusInd comes good. Banking stocks need to rally. On the downside 9980 will again be a support. So any dip below 10000 should be used as a buying opportunity again with a target of 10080 and those who have the positions, wait patiently.
Bank Nifty expiry day today and 24200 call and 24000 put will be in action. Play them with caution!