Every second day Trump does something which becomes a reason for US markets to feel jittery and fall. Yesterday night it was his statement that he will shut the Govt. to build a wall across US-Mexico border that created ripples in US markets and Dow lost 90 points by the time it closed. Asia didn’t take that very seriously and even India might not react to it that much but we can’t say the same about Europe as its proximity with US is much higher. So how markets react in the afternoon needs to be seen closely. For now Asia is in mild green and NIFTY might open flat at around 9850 and what happens later needs to be watched carefully.
My suggestion at the beginning of the week to go long at 9760-9780 zone with 9850 as target has been achieved yesterday. I assume that the long positions taken would have been closed by yesterday evening. If not, I suggest to exit them at the first available opportunity early in the morning today. Today it will be flat markets with a chances of less upward movement. Selling at the 9850 levels and lack of buying might even drag the NIFTY down later in the day and we might see NIFTY testing the 50dma again. Will it take support there and close above that or break it and provide relief to the bear need to be seen. With global uncertainties looming large nobody wants to keep their long positions open for the 3 day weekend.
F&O data also suggests a down day today as FIIs unwound lot of their long positions they created when 9850 was achieved yesterday. Now the FII long exposure in Futures stands at 51% which is the lowest in this series. The premium of the Futures also came down from 19 points at the beginning of yesterday to 10 points at the end of the day. That indicates a massive unwinding of long positions. Also in options market the 10,000 call continue to get lot of shorts and that makes it very difficult for NIFTY to cross 10,000 level. But one good news is shorting happening at 9800 put which will keep NIFTY at 50dma levels for the rest of the series. The NIFTY put call ratio rose to 1.19 yesterday from 1.09 seen the day before.
In stock news, Infosys will rally a bit today on the news of Nandan coming back as the non executive chairman of Infy. How much will it rise will 900 be held will there be any selling for weekend needs to be seen.