Market and News

Weekend is here and another week is coming to an end. Things look as confused as they were at the beginning of the week. US markets have stabilized the volatility is slowly disappearing and Dow has reconquered the 25000 mark and US 10 yr bond yields have dropped from 2.92% to 2.89% and they look like coming down. Brent crude is still at 64 dollars and not showing easing off. Asian markets are shut today also as Lunar New year of China is an extended holiday with many rituals lined up. so Japan and India are the only two markets that would be trading today.

Domestic Cues

Coming to India’s cues things are bit scary and worrying and I really don’t know how much and how many will affect the market. PNB scam is getting worse hour by hour and we don’t know what will happen today and in the weekend. So, how many would want to risk and take their positions to Monday needs to be seen. Second is the worst trade deficit numbers that we got in 56 months. Trade deficit comes at whopping 16.3 billion dollars because of 26% increase in imports and just 9% increase in Exports. Petroleum imports rose by 42% while import of precious stones went up 56%. On the exports side drugs and pharma exports grew by 8% while ready made garments exports declined by 8%. This is the major reason for the low figure of exports.

On the derivatives front, Nifty holding on to 10500 has made many to take long positions in Nifty futures and the overall long positions now stand at 47% vs 43% seen on Monday. This is slightly better picture and Nifty futures is also at a premium of 11 rupees which is good considering that we just have 4 trading sessions for expiry. On the options front, unwinding of calls is happening at 10700 and 10600 levels which is indicative of some positive movement on the upside. On the put side 5.8 lakh contracts got built at 10500 at 66 rupees premium meaning 10480 is a very strong support. That has a maximum open interest of 40.2 lakh contracts. All this means Nifty put call ratio went up to sharply to 1.13 level from 1.00.

What is the Nifty call for the day?

Expect a positive opening for Nifty at 10580 to 10600 levels due to positivity in US. But how long it sustains needs to seen. 10620 is a strong resistance zone and that if taken out 10650 is a resistance. So, Nifty has a limited upside and on the downside 10480-10500 will be a support. Nifty’s 50dma is also at 10590 and that will mean the upside is really limited. So, there is no point in taking any positions in Nifty today also and you really dont want to carry it forward to Monday. Writing options is also bit risky so I suggest to follow me on twitter to get the calls as I give it.

What is the bank Nifty call for the day?

Bank Nifty is more bearish than Nifty primarily due to PNB mess. Bank Nifty has the potential to test the 200dma at 24600 and might take support there. It might open flat today and after that it might slide into red. So, it is better to buy a put in the bank Nifty maybe a put at 25500 at 70-90 rupees and keep a target of 180-200 rupees. You can also go short on Bank Nifty at 25200-25400 levels with 24800-24600 as target. Risky and do it only on advice.