Market and News

A scary afternoon took away 150 points in the last 2 hours of trade yesterday and we closed below 10150 levels yesterday. That was mainly due to 500 point correction in Dow futures on the news that China has imposed tariffs on the 106 new products that it is importing from US. But all this was a short lived thing as the Dow started to recover in the evening and Dow moved 800 points intraday with Dow closing 230 points up. This kind of volatility is dangerous but good for money making. The result is Asia is green today. Brent Crude is still at 68 dollars.

Domestic Cues

On the domestic front, today will be day of monetary policy and everyone is expecting a no change in the policy whether its Repo or CRR or SLR. The important points however would be if there are any rate hikes coming in 2018 calendar year. Added to that will be the inflation forecast for this fiscal first half and second half. MSP for farmers have been increased in this year’s budget and that will push up food prices and with Crude around 70 there is always a danger of higher fuel prices. Both could present a danger of inflation going above the RBI forecast of 5.1% this half and 4.6% in the next half. The other thing to watch out is the growth forecast which stands at 7.2% now. We need to watch out for the tone of RBI.

Derivatives Action

On the derivatives front, there has been a mayhem in the Futures market in the last 2 hours of trade and that created a lot of short positions in the futures market. On the options side also there was a sudden surge in call shorting and puts were unwounded as Nifty started falling. The Nifty put call ratio came down sharply in the last 2 hours to 1.34 from 1.43 seen at the beginning of the day. 10300 call saw maximum action with 9.3 lakh contracts followed by 10400 call with 7.3 lakh contracts. 10500 call also saw a late surge of 5.7 lakh contracts and its now at 27 rupees premium. On the put side 10100 put has 1.6 lakh contracts while all other puts saw massive unwinding.

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

Today is the Bank Nifty expiry. Yesterday you have met your target of 24650 taken at 24350 and I had suggested to go for another long positions at 24100 levels and if you had taken that today you will again meet your target of 24650 in the beginning itself. That is a huge profit of 550 points and added to that is 300 points of yesterday. So, you really dont have to do anything much today. Just sit back, enjoy and wait for my tweets.

Nifty will also open up due to recovery seen in US and we will have a open at 10260 levels and 10280 will present the first resistance. If broken then you will get your target of 10300. If not also you will be on huge profits of 100 points for the positions taken last week and 130 points for the positions taken yesterday afternoon at 10150. I suggest you to exit at 10280 it if its a tough wall to climb. If Nifty climbs it then 10300 which is your target will be reached. All this has to happen before monetary policy starts by 2.30pm.