Markets and News

Penultimate day to expiry and things look bit steady. The rapid movement that World saw yesterday seems to have slowed down a bit. US closed higher but the bullishness has decreased a bit. Asia is also trading mixed with Hong Kong and Japan moving between red and green and after a big rally yesterday, today seems to be a day of consolidation. Brent Crude is also back to 70 dollar mark and that will not be a great news for an economy like India.

Coming to India, yesterday was a big day with NIFTY gaining another 100 points to go close to 11100 mark. Sensex crossed 36,000 and it took just 6 trading sessions for the Sensex to cross 1000 points. Things are dangerously moving fast and looks like today is going to be a slow day. In Q3 results United spirits came up with a howler, that says all is not going really well for Q3.

Lets look at the list of companies that are coming up with Q3 today.

1. Biocon
2. Canara bank
3. Container Corp
4. Indiabulls ventures
5. Idea Cellular
6. Indigo airlines
7. Jindal sAW
8. M&M Finance
9. Motilal Oswal
10. Pfizer
11. Pidilite
12. Radiocity
13. Raymonds
14. Saregama
15. TTK Prestige
16. Vijaya bank

Derivatives Action

On the derivatives front, yesterday saw a huge melt up in options positions and many call writers were closing their positions as NIFTY crossed 11000 mark. 11000 saw 29.2 lakh contracts getting covered and 10900 call saw 21 lakh contracts being covered. Even 11100 call also saw 2.1 lakh contracts getting covered. Now the call writing moved to 11200 call where 13.3 lakh contracts were created and premium at 12 rupees. On the put side there was lot of action at 11000 put that had 31.8 lakh contracts followed by 11050 and 11100 puts that had 10 lakh contracts each. That took the NIFTY put call ratio to the highest level in last 10 years to 1.89. This is not good for the market.

What is the NIFTY call for the day?

Nifty is likely to open flat or slightly down between 11060-11080 levels and 11100 is big resistance. If that is negotiated 11120-11150 zone will be the zone to watch out for. But NIFTY is likely to take a break today and might test 11050 levels today first and then 11020 levels. If that is not held 11000 will be the strong support. Today will be driven by Q3 results especially Idea and if the results are good then we might see market holding 11050 levels and might approach 11100.

Shorting the calls according to me is a wise strategy. 11050 call is at 65 rupees ad 11100 call is at 38 rupees. If the market doesnt cross 11100 then you can go for this, not in the morning. Morning you can look at shorting puts, especially 11000 put which is at 19 rupees is very safe if you want to make some money pledging your portfolio.