After an indecisive day yesterday, today seems to be a slightly better and positive day. US markets have ended flat and Asia is trading mildly positive. The macro commentary across the World to be more or less neutral and things seem to be falling in place. Brent crude which was on the verge of breaking 60 dollars has now corrected to 58 dollars as many people took profits at 59.50 levels. This is a good news for sure. The US fed chair Janet yellen also gives a slightly positive commentary on inflation being under check thus removing fears of rise in interest rates rapidly.
What is the likely path for NIFTY today?
NIFTY is likely to open flat to positive around 9900 mark and 9950 could be the first point it will go to if it’s given free hand. The 9820-9810 levels offer strong support and I don’t think NIFTY breaking that today. If there is a dip towards 9870 levels after open, it’s a good point to buy with 9950 as target. Just keep a 40-50 point target for the positions you take in 9870-9900 levels and exit as soon as the target is reached.
The F&O data also suggests a strong resistance at 9950 levels and NIFTY has to work hard to cross this. There are call being shorted at 9900 and 9950 levels and shorting of puts at 9850 and 9800 levels. That means the expiry range as of now is 9820 to 9940 and that’s the reason why 9950 is such a strong resistance mark. There were more calls shorted than puts and some call buying at 9800 was also seen which took the NIFTY put call ratio slightly down from 1.12 to 1.11 levels.
ICICI Lombard will list today and this is also not a great IPO according to me. Its a general Insurance company and the valuations currently dont support the 660 kind of listing which is around 25x of its FY’19 forward earnings. So the stock might correct after the listing. It could happen today or some time in the near future.