Nifty Trading Ideas

Market setup 14th September

Record high close for US markets with S&P 500 touching 2500 mark and Dow above 22150 and Asia is in mild green and India is likely to open flat with slight negative bias above 10,050 levels which is a strong support. If NIFTY takes support there then move towards 10,100 is possible through the day. Else the next big support comes at 10,020 levels and that means another red closing for NIFTY.
As I told yesterday, any dip towards 10,050 or below should be used as an opportunity to buy. The mild correction is also due to overheated Put call ratio of 1.52 vs 1.50 yesterday. In the F&O markets FIIs sold nearly 800 Cr and DIIs bought 700 Cr making a net deficit of 100 Cr which took the market down. Plus the action of shorting the put went to 9950 and 9900 levels from the 10,000 levels and unwinding of long calls was seen at 10300 levels.
That’s a bearish sign and NIFTY has to overcome all this to start moving up. The last thing NIFTY wants is shorting of 10,200 or 10,100 call. If that picks up NIFTY will get arrested this series between 9950 and 10,100 and that will be a disaster for any plans of a 10,200 expiry.

On the macro front

Crude prices have been shooting up with two Hurricanes hitting US and brent is well above 55 dollar mark. Prices in India are skyrocketing and Mumbai is likely to touch 80 rupees today for Petrol and in Hyderabad the prices are likely to touch 75 rupees for Petrol today. Govt. has stepped in and wants the OMCs to absorb the losses and that has given a negative reaction yesterday. Petroleum minister clarified that no such move is expected to happen in near future, but the worry will remain.
So, it’s uncertain. WPI inflation data will arrive by midday and it’s likely to come at 3.1%. That means finally CPI and WPI are merging.
On the IPO front Capacit’e first day went very well with IPO getting subscribed 1.3x times. QIB and RII are over subscribed while the NII remain undersubscribed. Tomorrow is the day for another IPO ICICI Lombard. Its coming up with 8.62 Crore shares with a price band of 651-661 rupees. I am neutral on this.

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