We are now in the 2nd week of October. Two big events scheduled for the week. First is the Q2 results that were expected to touch double digit growth and second the usual CPI and IIP data. The results season kicks off officially on 12th Oct with IndusInd bank results but before that we have some small and significant players like Laxmi vilas bank, South Indian bank and TV18 broadcast coming up with their Q2 starting from tomorrow. 12th October is also the date when CPI and IIP data will be made available. So, the markets will be driven by fundamentals and technicals together this week. Korean tensions are again building up with North korea saying they will test another missile!
Where is the NIFTY heading today?
A flat start around 9950 range is predicted. If the start is below 9950 then 9950 will become a hurdle to climb but if NIFTY open at 9950 and starts moving then 9980 to 10,000 could be the resistance. So there is a mild possibility of hitting 10,000 today. But if 9980 is a resistance then it is going to be tougher journey to 10,000. FIIs are on buying spree and they have bought to close to 1150 Cr on Friday and 300 Cr of that was in NIFTY Futures. DIIs also bought futures and that took the future premium which was on 9 rupees on 3rd October to 24 rupees on Friday.
The NIFTY put call ratio also shot up to 1.37 from 1.26 indicating a lot of activity on put side. 9850 and 9900 puts were sold indicating a strong support at 9810 levels. Practically this has become a base now. On the up side 10,000 call shed open interest indicating that 10,000 will be taken out this series. Dont be surprised if NIFTY sits on all time high for this Diwali.
So what is the strategy?
Simple. Go and buy if NIFTY goes to 9950 and that’s a good place to buy. You can keep a target anywhere between 10,020 to 10,050 anytime this week. For today NIFTY will close flat to positive around 9980 levels. The NIFTY is going through a churning and looks like for the next 10 days NIFTY might not do anything that upsets the momentum. The stop loss for the positions can be 9850 and that is a huge stop loss which can help you to get bigger gains.