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Market Setup 22nd October

Finally the October month is coming to an end and we are in the last week of October. This is the expiry week and when Nifty ended 700 points down below 11000 no body would have expected in October we will see 10100 and be at 10300 at the beginning of the expiry week. There was a rally towards 10700 but it got fizzled out quickly and we are back to 10300 as Nifty fell 150 points on Friday. Today the cues from the global markets are looking positive, with Dow Jones closing in the positive territory and Asian markets trading mixed with Hong Kong gaining 300 points and China up 3% while Japan and Korea are in mild red. 

On the domestic front, the Q2 results that went slightly off track with Reliance is back on track now with HDFC bank coming with results matching the expectations. Though HDFC didnt deliver a blockbuster result it was decent to pull the market up or most probably stop further falling of Nifty. HDFC has 9% weightage in Nifty and that plays a very important role. Another positive news is brent crude with is still below 80 dollars reading at 79.6 and that is definitely good news. The dollar index is also stable indicating that Currency might strengthen a bit and might touch 73 levels or even go below that briefly. Much depends on the results that come today and Asian Paints is one company that is coming up with its Q2 numbers.

Following are the Q2 results expected today

  • Asian Paints
    2. GSK Pharma
    3. Canara bank Financial homes
    4. Hindustan Zinc
    5. Inox
    6. Jubilant Food works
    7. Oberoi realty

On the derivatives front, Friday saw a massive action on the short side but the point to be noted is Futures discount which was at 9 points at the beginning of the day has reduced to 0.1 points at the end of the day. On the options side also, there was a massive demand for calls as 5 calls were shorted for every put and the put call ratio is now at 1.07 from 1.12. A 1.05 PCR took Nifty to 10700 from 10200 last time, we have to see what happens now. 10400 call added 15 lakh positions while 10600 call added 12 lakh contracts. 10600 could replace 11000 as the strike with highest accumulated open interest and if 10300 sustains then 10200 might replace 10000 as the strike with highest accumulated open interest.

What is the Nifty call for the day?

A flat opening around 10300 is expected for Nifty and Nifty might take support in 10260-10280 zone and 10400 is the level where it might face a resistance. I would recommend you to go long today below 10320 levels with 10370-10400 as the target and if you dont get a chance then go long below 10350 with 50 points as the target for the day. Exit the positions for whatever profit you make.