Markets and News

Expiry week started on a scary note and yesterday saw a big fall which is unexpected and with US markets shut there is no cue that is really available today for us to see as to how long this volatility and uncertainty will continue. The inflation in US is rapidly increasing and the US 10 yr is still close to 2.9% and Brent Crude is above 65 dollars which is not a great sign. Hong Kong, Korea and Singapore have finally opened after Lunar new year but Shanghai and Taiwan are still closed for today also. Asian markets are low and how impactful it will have on India needs to be seen, as Hong Kong was shut when India was going lower.

Domestic Cues

On the domestic front, PNB is still making news as the crackdown on Mehul Chowksi and Nirav Modi and their associates is continuing. Govt wrote a letter yesterday to RBI asking them to brief on Govt to express their views on the whole scam. Today there is a meeting of the cabinet to discuss and take few financial decisions and we can expect some news on this front. Tata steel acquiring Bhushan steel was a no event as market completely chose to ignore that and today we have to see whether all this will end or not.

Derivatives Action

On the derivatives front, there was a lot of actions on the options front yesterday as many of the put sellers went for a cover as the Nifty started falling. There was a huge unwinding at 10400 put where 11.2 lakh contracts were unwounded and at 10500 put we had 13.2 lakh contracts were unwounded. Many of these short positions have to be closed as the stop losses were triggered as Nifty lost a 100 points yesterday. Now the whole set up has changed with 10300 put seeing maximum open interest of 11.2 lakh contracts at 40 rupees indicating 10260 as the new floor. The Feb series lowest is 10276 and that mark might be respected. On the call side 10400 call sae 23 lakh contracts indicating that 10450 is the temporary roof. The put call ratio remained unchanged at 1.07 levels.

What is the Nifty call for the day?

Nifty will open at 10350 levels and 10320 and 10280 are big supports. If Nifty touches that in the early morning hours its better to go long there with 10370-10400 as the target for this series. If Nifty stays above 10320 then its better to wait before taking any position. I also suggest buying a call if 10320 is broken but that should be done with care. 10400 call which is at 49 rupees can be bought when Nifty dips in the morning and that call might go to 40 rupees at the time of buying. You can keep a target of 70-80 rupees for that call. Exit as soon as you reach the target.

What is the Bank nifty call for the day?

Bank Nifty will open again below 25000 mark maybe around 24800 and I still suggest to avoid it as the PNB problem might haunt it. It is better to wait and watch before doing anything. Wait for my 11am call on this on twitter before doing anything on this index.