Markets and News

Equinox day, also called as Spring Equinox and looks like things are moving towards equality. Dow closed positive last night and Asia is also on the green today and things are looking slightly positive. But it cannot be taken as a recovery at any cost. There are global cues which are a bit worrying and today we will have to approach market with caution.

The FOMC meeting will conclude today and we will have a commentary by Fed at 11.30PM tonight will be very crucial to watch. There is a 100% probability of a 25bps rate hike and there is a forecast of an average of 3 rate hikes in 2018 and 10 year is forecast to go to 3.2% by the end of this year. The crude also is going up and its touching 68 dollars and even the Dollar is strengthening and today we could see a 65.50 hit on dollar. Facebook fell another 3% today and Twitter fell almost 10% with a lot of speculation on the reliability of data on the social media space.

Domestic Cues

On the domestics we have only technicals to deal with as we have tried to touch 200dma and cross it, but failed to do so. There are worries coming out of Govt dealing with lot of uncertainties relating to no confidence motion by TDP and the Nirav Modi investigation. Though nothing is specific it could start playing up in the minds of the investors as soon as Nifty approaches the 200dma. Yesterday’s recovery was a very feeble one and cannot be taken as recovery at all as Nifty touched 10150 fell from there and closed around 10120. It has not changed any of the technical indicators and today also it will face the same test.

Derivatives Action

On the derivatives front, things look even more uncertain as there was heavy shorting inspite of Nifty going up. The shorts on Nifty futures peaked when Nifty touched 10150 and that brought Nifty back to 10100 levels. The overall longs in the system now stands at 43% which is the new low hit in 2018. January series had a 80% long positions. Now it has almost halved. On the options front however things look like moving towards puts as market went up a bit. The put call ratio has moved to 1.05 from 1.04 which is a slight increase.

The put short shorting has resumed again and another interesting point is the long puts being unwound. 10000 put saw 3 lakh contracts built and 10100 put saw 3.7 lakh contracts built. 9900 put also saw 2.5 lakh contracts. On the options side 10400 call saw 6.9 lakh contracts unwinding and 10500 call saw 2.1 lakh contracts unwinding. However 10100 call saw 6.4 lakh contracts getting created at 120 rupees premium and that means 10220 could be the roof for the market.

So what is the Nifty and bank nifty call for the day?

The green in Asia means that India will open flat around 10120-10140 levels and again the 10166 which is the 200dma is the resistance. We need to observe carefully how the 200dma will be broken, if at all it is broken. For the short position taken at 10080 levels keep 10200 as stop loss as there could be a huge resistance around 10170-10200 zone.

Keep the positions open and dont close them. You can also think of trading in Options as we have just few days left in the series. That you can decide as the day progresses. Wait for my tweets on this.

On the bank Nifty front, it will be weaker than Nifty and at 24170 you can still hope for your 24000 to be hit in this series. You can even think of shorting 24300 call for tomorrow’s expiry but only after I confirm it in my tweets.