Markets and News!

Weekend is here and the market is active. There was a global party yesterday evening and today morning after we closed. US markets ended at another all time high. In last 7 trading sessions in 2018, Dow Jones made 6 all time highs and yesterday it went up by 200 plus points. Asia is green today pushing India to open in green. Brent Crude is above 69 but that will not worry the markets anymore.

But the only worry for India is that Q3 did not start on a great note. Both IndusInd and TCS declared below par results. The disappointment for IndusInd bank came in the form of NPAs which jumped more than expected. Gross NPAs jumped 22 bases points to 1.16% which is higher than expectations Another slight disappointment was Net Interest Income that showed a growth of 20%. Street was expecting 25-30% growth. However profit and other things have come as per expectations. TCS also declared a not so great results with profit dropping 4% to 65.4 billion. Another worry was the fall in BFSI segment which fell by 1.5%. So all in all just average performance by both the companies.

Futures and Options!

On the derivatives front, yesterday’s better than expected performance of NIFTY has pushed many to close their long positions. It happened in both 10600 and 10700 call where lot of short positions are unwound. Day before yesterday exactly the opposite was happening. The action seems to have again shifted to 10600 and 10500 put where lot of short positions are being taken. Now the market believes that 10550 will also act as a strong support. This closing of shorts on calls and opening up of huge number of puts pushed the Nifty put call ratio to 1.75 which is the highest we have seen in last 6 years. Last time we saw this was in 2012. This is dangerous.

What is the Nifty call for today?

The cues from Asia and US means there is a huge gap up that you can see and Nifty will open around 10680 which is going to be another all time high. Today 10700 might be achieved and the long position that you are holding for a week taken at 10480-10520 can be exited now at 10700 for a profit of 200 points. After reaching 10700 there can be a sell off and it might correct to 10650 levels. Taking another position and carrying it for the weekend is not a wise move. It is better to book your profits and go home and celebrate the weekend Sankranthi festival and come back on Monday with fresh mind! Happy Sankranthi!