Markets and News
I am a believer in fundamentals and technicals when it comes predicting the markets. Last few days bond yields and Crude prices are going up and by that logic Nifty should have come down. But it is not happening. The reason is primarily the technicals and the importance that the market is attaching to the expiry factors. The overall long positions started at 18% this series and went upto 40% now. The rollovers to May is at a record low of 18%.
All this indicates that everyone is waiting for the expiry to happen. It is because when there are so many shorts in the market then long positions will be taken to offset the shorts and make profit. So, until there is heavy shorting Nifty will not fall and with so many shorts already in the system nobody is willing to risk taking more shorts. Its a strange situations seen very rarely in the market.
Globally, US has closed almost flat yesterday with Dow in mild red and S&P in mild green. Today Asia is also as confused and the bad news is Brent Crude has finally touched 75 dollars. The alarm bells will now start ringing as OMCs have to cut excise duty to keep the prices constant and with Karnataka elections just 3 weeks away Govt will not dare to do anything now. The bond yields in US is also touching 3% almost and in India also the bond yields are touching 7.8% in India and very soon we might see a 8% bond yields which is not a very good sign.
On the domestics things look bright when it comes to GST tax collections. The March GST collections stand at 96,000 Cr and now the dream of touching 1 lakh crore looks real and it could happen as early as April itself. The corporate results are also good and all the companies that declared Q4 yesterday have done a decent job.
Here are the list of companies coming up with Q4 results today.
1. Bharti Airtel
2. Coromandel Cements
3. ICICI Prulife
4. IDFC bank
5. Network 18
6. Oberoi realty
7. Raymonds
8. Tinplate India
Derivatives Action
On the derivatives front, there was a lot of confusion as the Nifty touched the 10630 mark and shorts started appearing suddenly and that took away all the 21 point premium that Nifty futures was having. The overall long positions in Nifty futures now stands at 40%. In the options market also 10500 put and 10700 call remains the most active and attractive positions to take. 10500 put now has 57.7 lakh accumulated open interest and 10700 call has 48.8 lakh accumulated open interest. That means some call positions at 10700 call were unwound yesterday as Nifty crossed 10600 but 10500 put is adding a lot of open interest. Now 10800 call is getting some attention and 3.2 lakh contracts were added there.
What is the Nifty and bank Nifty call for the day?
Today also Nifty will open flat in the range of 10570-10580 and what happens from there needs to be seen. 10500 is a very strong support and breaking that seems to be tough. The premiums have also come down a lot and it really doesnt make any sense to enter into the market till you get a direction. Understand that everyday is not a trading day and today you need to watch if 10630 will be tested and whether it holds and Nifty closes above 10600. If that happens then we are going for a 10700 expiry and accordingly wait for my tweet to take a position. If nifty corrects towards 10500 by breaking 10550 then we need to be bit more cautious.
Bank Nifty is directionless as it is stuck in the range of 24900 and 25100. Avoid it till it comes out of that range. The 50dma and 200dma is adding to the woes of bank nifty by keeping it within the two moving averages. So wait for the bank nifty to break this and start moving before taking a position.