Market and News

We are right at the mid point of the month and the cues are also at the mid point, neither we can say it is bullish or bearish. The whole of the month has seen many ups and downs with many news hitting us. US markets have closed in red yesterday as the trade wars with China is intensifying and that could have a big impact on every market in the World. Dow lost 250 points to go below 25000 again and that has put Asia on a terrain of red and every market is in red today, though it is not a deep red. The brent crude is still under 65 and things are very uncertain across the world.
Domestic Cues
On domestics India apart from global worries also has some domestic worries to worry the top of it is the RBI governor saying that RBI cannot prevent every banking fraud and that’s a big statement. Added to this RBI is coming with more regulations pertaining to issuance and holding of bonds and even long term and short term hedging of bonds by the banks. More clarity is expected in few days on all these. The second worrying point is the UP and Bihar bypoll results where BJP lost all the 3 loksabha seats and from 282 seats in 2014 the tally now is at 273 now. 272 is the majority mark ans BJP is just holding that. The other point of view is not to take this UP bypolls seriously as voting percent was very low and doesn’t represent the true picture.
Derivatives Action
On the derivatives front, the futures market saw an equal number of shorts and longs yesterday, where in the morning there were shorts getting created and by afternoon long positions started picking up. The market is net long now with about 54% long positions. On the options front also there was equal amount of action on put and call side and that kept the nifty put call ratio unchanged at 1.27. There were 1.9 lakh and 1.4 lakh positions created at 10350 and 10400 put and at 70 rupees premium 10280 still seen as a floor. On the call side 10400 call added 9.5 lakh positions but lot of unwinding of 1.7 lakh positions seen at 10700 call and 1.8 lakh positions unwound in 10600 call. All this presents a very confused picture we need to see what happens today.
What is the Nifty and bank Nifty call for the day?
Today is the bank nifty expiry day and the market is likely to open lower. The bank nifty will open below its 200dma of 24800 levels and might find some resistance at 24800 levels. We need to see whether bank Nifty can break this 200dma or not. The support for bank nifty will come at 24600 and 24500 levels and most important thing is the close above or below the 200dma. I suggest you to stay away today also but the best bet is to short the 24900 call which is at 90 rupees premium and you can eat that.
Nifty will open gap down today below 10400 close to 10380 levels and 10350 will offer as a big support. If it holds that then the journey towards 10400 will happen again. 10450 is the 100dma and today if bank nifty crosses 24800 then Nifty might try to hold on to 10400 levels and move towards 10450 mark. Till things are clear, better watch the market than take any postions.