Markets and News

A week that starts on a sombre note with the loss of Sridevi, the diva the film industry will never have ever again. Tributes to her. Coming to the markets, US on Friday closed on a high with all of US markets going up more than 1%. The bond markets in US also have sharply collapsed from 2.93% to 2.84% and that could be a huge sigh of relief. The belief that inflation is not rising as fast as they have expected it to, has led to the drop in the bond market in US. Today Asia is all green and that presents an ideal scenario for India to open green.

Domestic Cues

On the domestics, this week is a very important week with Govt telling that lot of banking acts will be amended and that means something very crucial is going to happen to PSU banks. Plus this week on Wednesday we will be getting GDP numbers for Q3 will be out and if it touches 7% then all the worries of slowdown will be put to rest. Nifty on Friday went up almost a 100 points and that means the 100dma of 10400 is a firm support and the 50dma is at 10600 and that would be presented as a big resistance. The 100 dma is at 10100 and I dont think Nifty will go there. The 10270 which is the February low should be maintained and bonds also will also strengthen today and we might see 10 yr coming down below 7.7% and might even go to 7.65 levels. If it happens its a great news.

Derivatives Action

On the derivatives front, the shorting has finally come to an end on Nifty futures and the 45% long positions seen at the beginning of Friday went up to 47% by the end of the day. This is due to continuous uptrend seen on Nifty. On Options front also there seems to be some signs of bullishness coming. There are puts being bought for protection otherwise the market seems to be more bullish. There were 2 puts bought for every call but what is heartening is 3 puts sold for every 2 calls sold. 10300 put added 9.5 lakh contracts while 10400 put added 8.5 lakh contracts. On the call side 10500 call added 8.2 lakh contracts while 10900 call added 7.9 lakh contracts with a premium of 20 rupees. The Nifty put call ratio is at 1.43 now vs 1.41 seen at the beginning of the day.

What is the Nifty and Bank Nifty call for the day?

Asia is full of green and India will also open positive. On Friday you took a long position 10420 with a target of 10500 and today you will achieve that target at the opening itself. Nifty will open at 10530 levels and you might push your target to 10550 which is a profit of 130 points. Exit as soon as 10550 is reached and step aside to see how Nifty behaves. 10600 is a big resistance and Nifty needs to break that decisively for Nifty to have any chance of going up. so no point going long around 10550 levels as the scope is very limited.

On the bank Nifty front it the position you took around 25000 levels is at 25300 levels and today you might see the target of 25500 achieved. As soon as it is achieved step aside as 25600 is a resistance tough to overcome.