Markets and News
The 4th expiry day of the year 2018 is here. It is 2-2 so far for bulls and bears with Bulls winning January series with 650 plus points and now the April series with 450 points. The bears won the February and March series with 650 points and 300 points. April has seen a huge uptrend in stocks also with Reliance growing at 9%, Kotak bank 11%, Mindtree at 24%, TCS at 12% but there are losers also. SBI even after 4% gain in Nifty fell by 5%, PC Jewellers fell by 24%. IT stocks did well but Infosys and Wipro were flat. Infosys grew by 3% and Wipro by just 2%. Let’s wait and see if the 456 point uptrend in this series will be maintained and close above 500 point gain or not.
Global cues are looking flat and confused. Dow jones closed positive last night after 5 days of falling. The 10 yr bond in US has now gone to 3.02% and now that means that money is going to get costlier. Brent crude is still at 74.50 and its not good. Domestics wise its the Q4 results that is leading the market and Wipro disappointed yesterday with a bad Q4 numbers. Today there are crucial banks like Axis bank and Yes bank coming up with their Q4.
Following are the other companies that are releasing their Q4 numbers.
1. Axis bank
2. Rallis India
3. Reliance Capital
4. SBI Life
5. Tata Elxsi
6. Tata Metallics
7. Yes bank
Derivatives Action
On the derivatives front, its all about expiry today and the cues are primarily on the options market than on the futures market. This time the premiums are low compared to other series primarily because lot of short positions have already been taken as money making has become easy now. Its a lesson that whenever things get easy and predictable, rewards decrease. The calls have slowly come into demand now and yesterday the put call ratio came down from 1.70 to 1.61. 10700 call and 10500 put has maximum open interest but in between this all the strikes have become very active.
Following are the possibilities for today’s expiry.
1. Nifty opening flat, staying above 10580 and going above 10600 and closing at 10610-10620 range with 3PM moving coming on upside. This is the most probable scenario.
2. Nifty staying below 10580 but a sharp 3PM move might take it over 10600 and expiry happening at 10600 levels. This is the next possible scenario.
3. Third is Nifty staying above 10580 and a sharp cline at 3PM seeing the expiry happening at 10550-10570 level. 3rd most probable scenario.
4. Nifty staying between 10550-10580 with a downward 3PM move with expiry at 10520-10530 range. Least probable scenario.
What is the Nifty call for the day?
Today am leaving bank nifty as it is not very relevant and everyone will be looking at Nifty. Expect a flat opening for Nifty around 10570-10580 levels and 10630 will be the major resistance and 10550 is a support. with premiums so low, after the market opens, upon my call try taking a short strangle at 10600 call and 10500 put. At what point you need to go for it, will be tweeted during the day. Apart from that there is nothing you can do. Exit the long position taken yesterday for May if the target of 10600 is met.