Markets and News
Expiry week is here are US 10 year bonds hit 4 year high, Brent Crude at 74 dollars and Rupee well past 66, things are looking rather grim to start off this week. US markets have seen a drop on Friday with Dow losing over 200 points whereas dollar index is at a one month high crossing 90 and touching 91. Asian markets seem to have caught the cold from the US markets and are in the negative zone today. Hong Kong lost 200 points in the morning trade and the other markets also seem to be heading in that direction. SGX is over 60 points down and that means we are in for some rough weather early in the morning.
On domestics, HDFC comes with good numbers indicating that companies are doing well, but this being a lagged data of performance in last quarter we do not know how much it will have an impact infront of bond market and crude prices and rupee weakness that is playing out right now. We are in the expiry week and technicals also plays a vital role. The 50dma is now at 10360 and 100dma at 10350 and that is far away from where Nifty is right now.
The results season has started and following are the results expected today.
1. Cholamandalam Finance
2. Delta Corp
3. Indiabulls Ventures
4. LIC housing finance
5. Reliance Infra
6. Swaraj Engineering
Derivatives Action
On the derivatives front, things were bullish on Friday when Nifty was going up in the afternoon and at the end of the day Nifty futures premium surged from 6 points at the start of the day to 21 points by the time markets closed. There were 2 long positions taken for every short position on the Nifty futures market. On the options front, the Nifty put call ratio remained flat at 1.62 vs 1.63 seen at the beginning of Friday. 10500 put and 10700 call are the most active puts and calls as of now. 10700 call has 50 lakh accumulated open interest positions now and 10500 put has 54.9 lakh accumulated open interest positions. 10700 has a premium of 10 rupees which means any uptrend will face resistance at 10710 mark and at 20 rupee premium for 10500 put 10480 is the floor for the market. This could all change if there is volatility either on the upside or on the downside.
What is the Nifty and bank Nifty call for the day?
Asian markets and SGX indicates that we will have a gap down to start the week with. If you have the short positions taken last week, that will meet its target today. Nifty will open around 10520-10530 levels and could touch 10500 intraday. Any drop there should be used to exit the short positions and book the profits. 10480 will act as a huge support and from there Nifty might see a rally if things improve. But if 10480 is broken then we are in for a deep trouble. Wait for my tweet during the day for the option calls.
Bank Nifty would have given you the profits for the short positions and the 50dma is at 24880 and that is the maximum bank nifty can fall. HDFC will give the support that bank nifty needs and it wont go below 24900 levels. It is better to wait and watch on bank nifty because there is a big bond problem that is there and bank nifty needs to hold that. So, it is better to avoid bank nifty as of now.