Welcome to November series!!
Last year’s series was the worst with NIFTY losing out 700 plus points. This series can be a different story if the current scenario continues. But will it continue or not need to be seen! The biggest news from US is Twitter gaining 15% in a single trading session while Nokia losing 21% in a single day. Looks like US is following what India did couple of days ago. If we look at the macros for this series, banks will be in the focus for all right and wrong reasons so banks and bank nifty will be very volatile.
The Q2 results so far seems to be good and with November reporting around 40% of results, it will surely affect the market a bit. Third major macro factor that affects this series is the Crude price which is almost touching 60 dollars and that would mean more pressure on IOC, HPCL and BPCL if Govt is bent on keeping the petrol and diesel prices low, as Gujarat and Himachal Pradesh go to polls.
On the derivatives front, this series start with some interesting cues.
This series starts as the heaviest series in terms of Open Interest with 2.3 Crore contracts as open interest at the beginning of the series. The roll overs has been the maximum for October with 73% of the contracts rolled over from October to November.The put call ratio also starts off with a healthy 1.40 and that means quickly we will go into overheating zone if PCR crosses 1.50 which can happen in the first week itself.
If we look at the markers of this series 10,000 put has the maximum open interest and so is the 10,500 call. 10,000 put has 62 rupees premium and 10,500 has 70 rupees premium. So, broadly market is going with an assumption that NIFTY could gravitate between 9940-10570 range which is more than 600 points! The figure might look big for you but if October series can gain 550 points, Surely November can gravitate 600 points! No big deal.
So what is the NIFTY strategy for the series?
Take a long straddle and that’s the safest option. On Futures front go and buy Nifty when it dips below 10300 and that would help you in the coming days. For today NIFTY will open around 10,350 and it can be a positive day except Yes bank which reported divergence of nearly 6000 Cr NPAs might take the yes bank stock as well as bank nifty down. Look out for Yes bank as they have a big problem to deal with. The stock could fall below 300 in the near term. Nifty however might close positive or flat!!