Markets and News

What a week to start with!! US has added an unprecedented 3.13 lakh jobs added in February which is much higher than 2 lakh added in the previous month. Job creation is an indicative of robust economic growth and US seems to have been entering into that zone. The bond yields continue to be at 2.9% with anticipation of rising inflation due to job creation and all that have resulted in a 400 points plus positive close for Dow crossing 25000 mark decisively on Friday and today morning Asia has picked up the trend with Hong Kong going up 400 plus points and every Asian market in green.

Domestic Cues

On domestics India has problems of its own with Govt clamping down bank lending due to sharp rise in NPAs. The investigations on Nirav Modi and Mehul Chowksi have intensified over weekend and the name of former governor Rajan is also doing rounds saying that Rajan knew what was happening but still remained silent. However all these are rumours and nothing is on paper now. Karti Chidambaram scam is also under probe and with Rajya sabha still resisting any move by govt to pass crucial legislations. The crucial IIP numbers for January and the CPI inflation for February are expected at the end of the day today and there will be a lot of anticipation around those figures.
Derivatives Action
On derivatives front there has been a lot of long and short positions that were taken on Nifty on Friday and a flattish market on Friday meant a lot of shorts are still remaining in the system. The Nifty is 53% short even today morning and that presents a very different scenario with any sharp up move triggering a rapid short covering. On the options front, action is slowly shifting to the put side of the contracts than the call side with 10100 and 10200 still the most popular strikes to take short positions. On the call side unwinding of positions have resumed at 10400 levels and short positions were initiated at 10600 call. All this meant the Put call ratio remained at 1.14 level by Friday evening.

What is the Nifty and bank Nifty call for the day?

Asia is green all over and that means India will also open and a big gap up is expected with Nifty opening between 10300-10320 levels. On Friday I suggested you to take a long position at 10230 levels, which if you would have taken you will be sitting on the profit of close to 100 points. I have referred to a target of 10330-103340 which will be achieved and as soon as it is achieved it is better to exit the position and wait for a dip to take a new position. The crucial period is the post Europe open where market is expected to have some volatility. If Nifty drops below 10300 but stays above 10270 levels then take a long position again around 10270-10300 levels after 3PM and before close.
On bank nifty you need to be slightly more cautious than Nifty and bank Nifty will open at 24600 levels and 24750 is the 200dma. If you have a long position taken at 24500 levels today you will again open with profit and it is better to exit at 24650 to 24700 levels with a profit close to 200 points. Observe bank nifty carefully before taking any further positions.