We expected a up day on the market what we got was a flat day. Though market started off on a positive note and went up more than 70 points within 1 hour, it slowly lost steam and fell below 10850 mark and closed there. This shows that there is something that is not completely right, Nifty never went near 20dma and crossing it itself looks like a difficult thing. Though the selling of FIIs has come down but buying is not happening and Nifty is going nowhere.
Globally things are bright, but how much of it will be passed on to us needs to be seen. Dow went up last night ahead of the Fed statement and easing trade tensions. Today morning also Asian markets are in bright green with Hong Kong up almost 200 points and Japan up 150 points. Brent crude nw has inched upto 61 dollars.
Domestically, Jio rolled out its fiber plan that starts at 699 per month and that is going to be the big talking point. The fiber optic plan is not detrimental to any of the other players so we will not have much of an impact on players like PVR and Airtel. The other talking point in the market is going to be the final set of announcements that are going to come from FM today after the market closes. Nifty might end on a positive note ahead of these announcements.
This market is now split between fundamentals and technicals and is bit directionless. It is not reacting to global factors, so any positive move can only take it to 10960 levels but not beyond. Only a fundamental news can break that mark and hopefully what Nirmala Sitharaman says in the evening might bring some cheer next week.
On the derivatives front, selling again resumed in the futures market by FIIs and they sold to the tune of 250 cr in Nifty futures. This is primarily due to the fall post 10.30AM. But there was some buying that happened in options market and Nifty put call ratio went up to 1.24 and we are now in the short term bullish in options.
Yesterday’s expiry happened on a turnover of 26.49 lakh crore and now even for weekly expiry we are crossing the 25 lakh crore mark. For the 12th September expiry, 10800 put has the highest open interest indicating a very less chance of Nifty going below that level. On the call side 11000 call still has the highest open interest and thus crossing 10980 mark till 12th September is looking difficult unless there is a fundamental news which can break this levels.
What is the Nifty call for the day?
Yesterday we had a gap up and that got sold into and we have gone below 10900 mark and ended at 10850 mark. Today also we have the same situation like yesterday where we will again open around 10880-10900 mark and initial movement can take Nifty to 10920-10930 zone which is yesterday’s high and a resistance. If that is taken out then 10960 mark is possible. On the downside 10830-10850 is a strong support and since we dont have any negative news I feel that this level should hold.
So, once markets settles down at 10880-10900 mark, I suggest taking a long position with 10950-10970 mark as a target. Exit at this mark and keep yourself free and taking any positions to next week is slightly risky. FM will speak in the evening and if the announcements are not to the expected level then we can see disappointment on Monday. So, its better to stay away from any risky trades.