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What we saw was something that dates back to 2008, two days and 400 points lost on Nifty. At 11 AM on Friday, we were knocking at the door of 12000 and by Monday evening we are precariously close to 11500. Brutal selling yesterday led to a 250 point fall which is the highest single-day fall in 3 years. Globally things are not all that bright, Dow closed in red losing more than 100 points mainly on the news that there is no rate cut coming.

Jerome Powell is going to make a statement tomorrow on fed policy and it will be closely followed. Also, Apple which was till a month ago the stock with the highest brand value in the World has been downgraded and that has ruined the sentiment across US and Asia. This news of Apple downgrade has put entire Asia in red except Japan are in red, with Hong Kong losing more than 100 points. 

Coming to domestics, the sulk continued yesterday as Govt is very clear that it is no mood to reconsider taxes imposed on HNIs and FPI investors. Will this mayhem continue today or not needs to be seen. 11500 is a support zone for Nifty and protecting that is very important. Else we are on our way towards 11100 mark. Now the technicals are also not supporting Nifty as it is now in the middle of 50dma and 200dma. 50 dma is 11750 and the 200dma is at 11100 mark.

Added to that is the fact that Q1 results are starting today and the general expectation is that it’s not going to be great. IT major TCS is coming up with its Q1 numbers, probably after the market closing and we might see the impact of it tomorrow. Brent crude is still at 63.5 and rupee below 69 mark are the only positives that we are looking at.

Coming to derivatives, yesterday was a mayhem in the Futures and Options market with 400 Cr of net selling in Futures which has brought down the Nifty futures premium from 32 points to just 7 points. The overall long positions in Nifty futures dropped from 58% at the beginning of the day to 50% by the end of the day. The options market has seen the Nifty put call ratio that was not seen since demonetization.

The Nifty put-call ratio fell to 0.88 from 1.09 mark and everything looks oversold. 11700 call added a record 31.1 lakh positions yesterday and now it’s just few thousand contracts away from being the strike with highest open interest. 11800 call also added 15.3 lakh positions. On the put side, 11500 put added 5.9 lakh positions and it is now the strike with highest open interest on the put side. 

What is the Nifty call for the day?

Yesterday was a day to forget if you are a bull and we have seen Nifty finding some support at 11500 levels and bounced back to close above 11550 mark. Today is another day where Nifty might open in 11530-11550 range and 11470-11500 should come as support and Nifty cannot hold it, then we might see another down day where Nifty may go to 11400 mark.

But if there is a support at 11500 mark and Nifty goes up then we can see 11620-11650 mark today. So, today is the day when we might see a 11650 or a 11400 on the screen. So, it’s better to wait and watch rather than rush into doing anything. All that you can do is to hope for a recovery. If Govt makes some announcement on taxes on FPIs we might see some recovery, otherwise Nifty will see another day of anger and sell-off.