A big fall of near 100 points to touch 11000 and then a rally of nearly 150 points from the bottom to touch 11145 before settling the day around 11120. That sums up the markets yesterday and many are hoping that this 11000 is the firm bottom and we are on our way up. The cues coming from globally really are not good.
There was a rate cut happening in the US almost after a decade and it was a 0.25% cut and Fed Chair Powell has indicated that this could be just one-off and an adjustment. That did not go well with Dow and it lost more than 300 points and that also had an impact on Asia, where the Asian markets are mostly in flat to negative territory. Hong Kong is down 160 points while Japan is in the mild green of 20 points. Brent crude is trading around 64-65 zone at 64.3 dollars.
Coming to domestics, the pain is even deeper with the Q1 results as well as the macro-economic data both not encouraging. The core sector data that came last evening after markets close came at 0.2% which is a 50 month low. The other data to watch out is the tax collection for Q1 which came at 1.4% while the expectation was above 10%. This lower tax collection indicates a very low profit on the back of low demand which resulted in lower tax collection.
On the Q1 results front also Eicher Motors and Ashok Leyland both disappointed big time with a huge fall in profits and Eicher reported a fall in market share. Today we have Airtel, GSK Pharma, Marico, Tata power coming up with their Q1 numbers. Also awaited will be the auto sales numbers for July, which is expected to be worse than the month of June. So, no good news at all from anywhere.
On the derivative front, today is the weekly expiry for the Nifty and Bank Nifty options and the cues will be mostly driven by the expiry factors today than the macro and Q1 results. This is because nothing is surprising and all of it is lag data and market already knew about it. The put-call ratio turned bullish with the rally we say after hitting 11000 mark and now the PCR stands at 1.09 vs 0.97 seen at the beginning of the day.
11000 put added 7.2 lakh positions and this is the firm bottom now for today’s expiry. 11100 put also added 4 lakh contracts and it is close to 11000 put in open interest, which means if Nifty stays above 11100 today, then 11100 might be the base. On the call side, 11300 call still has the maximum open interest followed by 11200 call which means most probably 11100-11200 will be the markers for today’s expiry.
What is the Nifty call for the day?
Today, we have negative cues both globally as well as domestically but what will dominate Nifty will be the expiry factor. The opening will be on the lower side like yesterday, and we might open around 11080-11100 mark and we need to see where Nifty goes from there. First support will come up at 11050 and then at 11000-11020 levels. Nifty should hold onto it. On the upside 11140-11150 which is yesterday’s high as well as 200dma might be resistance. If Nifty crosses that then 11200 is possible.
So, the trade for the day is once Nifty finds its base at 11020-11050 levels we can take a long position on futures with 11120-11140 as the target.
A 3 PM move on upside might take Nifty beyond 11140 mark but don’t bank on it. Book your profits as soon as Nifty hits 11120-11140 mark.