Finally the weekend is here and we had another fall of 57 points. The expiry was there and there was no visible 3 PM move and the 7th session running we ended in red and we lost 500 points in these 7 sessions. Globally things are looking up, Trump announced on TV that the Chinese President had written a nice and beautiful letter and suggested to resolve the trade issues more amicably. That has helped Down Jones recover almost 400 points from 650 point fall and ended 140 points lower. However, Asia is in the deep green today with China up more than 2% and Hong Kong and Japan are up 300 points and 100 points respectively. Brent Crude also went up above 70 and trading at 71.1 dollars now.
Coming to domestics, there are deep worries on Q4 results front now. Asian Paints and Voltas are two companies that are most trusted consumption companies which gives steady numbers. Yesterday both Asian paints and Voltas disappointed indicating weak demand. Rather than these two companies reacting, the market will like to see the trend. Continuing the trend today, SBI and L&T another two very important economy indicating companies are going to come up with their Q4 numbers and their performance will decide where markets go in the next few days. Today evening we have the IIP numbers for March that are going to come and any figure less than 1.8% can be disappointing, considering that we got 0.1% last month. Also, we have the 6th phase of polling happening when markets open on Monday.
On the derivatives front, yesterday was the expiry and we had a good turnover of 21.4 lakh crore, though it is good, its not as good as 22 lakh crore plus we saw last week. There was a lot of shorting in Nifty futures for which its not an expiry yesterday. The Nifty futures premium contracted from 52 points to 33 points and the overall long positions fell from 65% to 61%. The options, however, were different as there was some demands that has come for puts and the put-call ratio went up to 1.38 from 1.04 mark. Very interesting thing to note for 16th May expiry is 11500 call has the highest open interest followed by 11400 and then 12000. Yesterday 12000 call added 8.2 lakh positions. On the put side, 11000 put has the highest open interest followed by 11300 and then 11500. So, very difficult to predict where the Nifty will expire as of now.
What is the Nifty call for the day?
If you would have taken long positions 11300-11320 mark as I suggested yesterday you would be in a no profit, no loss zone and today we are likely to open around 11300-11330 mark and it might go up to 11400-11420 which is resistance. So, you will achieve your targets today. News on US-China trade deal is going to be out between 10 AM to 12 noon and that might have a huge impact on the market. If there is good news you might see Nifty shooting past 11400 mark. Bad news might break 11250 which is yesterday’s low and we might travel towards 11100 which the 100dma and finally towards 11000 mark which is the 200dma. As of now, things look as if we might get good news from China so the odds are in favour of bulls. Let’s see what happens.