Trade Setup

The last day of the month and there are some worries to take note of. Crude oil touched 61 dollars last night and the 10 yr bond is at 6.87% the highest in more than an year. The US markets also ended in red. The FOMC fed meet starts today and ends tomorrow. The Asian markets are mixed, due to macro data from China. China’s manufacturing data comes at a 3 month low and the real chance of China’s growing is still not on. Another worry is the household spending of Japan which comes at a negative of -0.3% vs expected +0.7% and the previous month’s +0.6%. Today is also the day when Bank of Japan will announce their benchmark interest rates. All in all not so positive cues from world wide and our Q2 results are also mixed. Tata steel which was expected to do well has disappointed a bit in terms of EBITDA per tonne and PAT.

On the F&O front

There is a new scenario developing. The Open interest of 10,000 put for December series is higher than the 10,000 put of November. The November series has a open interest of 48 lakh contracts compared to 52 lakh contracts for December trading at a premium of 70 rupees. Gujarat elections are due in this month and that is an interesting cue to watch out for. For the present month 10,400 put started seeing some shorts and that’s a huge positive. Another positive is 3 puts where shorted for ever 1 short call and that took the NIFTY put call ratio to 1.48 from 1.38 yesterday.

What is the call for NIFTY?

NIFTY will open at around 10,350 mark and the resistance point at 10,380 and 10,400 still continues. But if there is any earning negatives then NIFTY could test 10,300 levels. This should be an opportunity for entering into a fresh long position between 10320-10340 that was not possible yesterday. Do not short NIFTY come what may, as the trajectory for now seem to be on the long side.

Q2 results for today

1. Ajanta Pharma
2. Bharti Airtel
3. Container Corp
4. Dabur
5. Escorts
6. IDBI
7. Indigo Airlines
8. KPIT
9. Naukri
10. SBI Life
11. Symphony
12. Syndicate Bank
13. VST Industries
14. Zee Media