Markets and News!

Mid week is here and some worries are also back. US ended mildly red yesterday after a long weekend. Asia is also showing some mixed signs today. Now all this can be seen as technical correction because you cannot be going up all the time. So its not a big reason for worry but for India it means the opening will get affected. The only good news is brent crude prices coming down a bit to 69 dollars.

On domestic front, there are not many fundamentals the market to push up. The new 10 year bond will start trading now with some volumes and we need to see where this 7.17% bond goes. It is likely to start the day at 7.38% and where it goes from there need to be seen. If it quickly touches 7.4% then its a bad news.

The second fundamental is the set of Q3 numbers that are coming. The major among them is HUL. There is a lot of expectation around HUL as the stock went up by more than 50% in last one year and now the expectations will be to deliver. The sales volumes are expected to be around 8-9% anything below that is a disappointment. Revenues are expected to grow at 10% range and PAT around 11% and EBIT above 20%. Any miss on these fronts will not be good news for the stocks.

Following are the other Q3 results expected today

1. Adani power
2. Adani Transmission
3. DCB bank
4. HUL
5. Bharti Infratel
6. Mindtree
7. SREI Infra
8. Tata Sponge
9. Zee Entertainment

Futures and Options!

On the derivatives front, yesterday’s fall triggered a panic reaction among the put selling especially those selling 10700, 10600 and 10500 put. 10700 saw an unwinding of 4 lakh contracts, 10600 saw 2.4 lakh puts covered and 10500 saw a whopping 7.1 lakh contracts unwounded. All this is a panic that 10700 might not hold and NIFTY might come back to the support zone of 10550 level.

On the call side 2.4 lakh contracts were added at 10700 call and 2.7 lakh contracts at 10800 level. At 35 rupees premium there is a consensus building at 10840 might be the roof for this series. Yesterday market was trying to find out the floor. The put call ratio is now at 1.46 level which is lower than 1.54 seen at the beginning of the day.

What is the NIFTY call for the day?

NIFTY is likely to open flat below 10700 level and might try to take support at 10680 and if that is not held then 10650 might be a big support.

The Q3 results will trigger the growth with 3 NIFTY stocks declaring results. HUL might give a direction to the market in the last 1 hour. I feel that any dip below 10680 will be a good opportunity to buy with 10750 as the first target. Do not short this market as it is still not clear what exactly is the direction of the market today.