Finally we seem to have found a fundamental to explain the falling market. That is the depreciating rupee and weakening macro economic data. US markets closed at a record high with Dow gaining 56 points and S&P 500 making a big gains and going towards 2510. But Asia is mixed with the strengthening dollar. Dollar Index is at 93.5 now which is almost a one month high. Rupee has rapidly depreciated to 65.75 and today things could get worst and we might see a 66 on Rupee. Today is also expiry day!

What happens to NIFTY today?

Expiry day moves are bit more technical and in consideration with the expiry. We might open a bit down at the yesterday’s low of 9710 and then it needs to be seen whether that level holds or not. We might on an intraday basis touch 9670-9660 levels and on the upside 9780 will be a big resistance. Then its all dependent on 3PM move on which direction it comes.
1. If NIFTY stays around 9730-9750 levels throughout and if 3PM movement comes up then we could have a best expiry around 9780.
2. If NIFTY hovers around 9710-9740 levels and 3PM movement comes above then we could expire around 9750 levels. If the same 3PMmovement happens downward then we will have a 9700 kind of closing.
3. Finally if NIFTY is below 9700 moving around 9680-9700 and 3PM movement comes above then expect a 9720-9730 expiry. If it comes down then expect a 9650 expiry which is the worst that can happen to bulls.

What is the data from F&O suggesting?

There was some buying seen at last from FIIs and they have been seen buying Index futures. That means if NIFTY falls below 9710 then we could see some panic selling from FIIs which could take NIFTY quickly below 9680. That’s why 9710 is a very important level to protect. FIIs also have sold 9700 and 9750 calls indicating that these are the roofs for the market. 9750 has a premium of 30 rupees that makes 9780 will be a big big resistance that we could encounter for today. This kind of call shorting has brought down the NIFTY put call ratio to 1.00 from 1.11 and thats a huge negative for bulls.

What is the trade for today?

For the first time calls are making more money than puts. As the day progresses start looking at calls and see how you can make money. Shorting 9700 put is very risky and I would suggest you to do that only if you have a strong conviction that expiry happens above 9680. The premium is at 22 and you can eat that only if you short it in the morning. But my suggestion is to look at the calls and keep buying and shorting them as the day progresses. For data watchers this is the worst expiry in 2017 where NIFTY lost 182 points so far. The next worst was the November 2016 demonitization series where NIFTY lost 650 points. Lets see where the pain ends today!