Markets and News
We are just 5 days away from Karnataka elections and a 100 point rally yesterday is an indication of things to come. Market is expecting that BJP is surging ahead of Congress in Karnataka and nothing else can explain the 100 point rally on Nifty. US last night also went up and Dow Jones closed almost at a gain of 100 points but at one point it was up almost 300 points. The tensions with Iran are the main reason for the Dow to shed the gains. Crude for first time in almost 5 years touches 76 dollars and now its trading at 75.6 dollars. That is surely a bad news for India. Dollar index is surging close to 93 and Rupee might stay above 67 for most part of the day.
Domestic Cues
On the domestics, the major news is the ICICI results where slippages went up by 259% something which you rarely see in any balance sheet. The profit is down by 50% but the positive side of all this is, that these slippages and drop in the profit is in the restructured loans and NPLs and is the part of the cleaning up of the balance sheet. This might act as some comfort to ICICI, which otherwise has a bad Q4 to deal with. ICICI inspite of all this might take all this positively and the stock might start moving up. In macros, Trump’s decision on imposing sanctions will come at 11.30PM IST tonight and that will be a factor that might have a huge impact on World markets including India tomorrowTomorrow we might see a lot of volatility including a huge gap down also.
On the Q4 results front, following are the Q4 numbers expected today.
1. ABB
2. Aditya Birla Capital
3. Bluedart
4. Hathway cables
5. Jubiliant Foodworks
6. Kajaria Ceremics
7. Whirlpool
Derivatives Action
On the derivatives front, more than Futures the action was more on the options yesterday. For a long position that traders are taking in Nifty futures, they are going and buying puts as a hedge so protect themselves from the losses in case of a fall. On the shorting side also, puts are more in demand than calls and 4 puts are being shorted for every call. This is a positive sign and we can expect some kind of protection once Nifty falls below 10650 levels. All this meant that Nifty put call ratio surged to 1.55 from 1.49 seen at the beginning of yesterday.
What is the Nifty and Bank Nifty call for the day?
A green Asia means Nifty will open above 10720 zone and there is some resistance coming in at 10750 levels. If that is crossed then journey towards 10800 is possible. 10780 is another frontier to cross and let’s see if Nifty has the strength to do that or not. Tomorrow is a very risky day because of Iran and if Nifty goes to 10780 and fails to touch 10800 it is better to book profits and look forward to re-entering again if there is a gap down tomorrow. Macro news are very risky to trade, so think of exiting today if things go fine, and pocket your profits and wait for the opportunity again.
I give the similar call to Bank Nifty also and today it might be more volatile than Nifty because of the impact of ICICI results. We need to really see how the results are taken. Today there is a chance of Bank Nifty going to 26000 and if that happens exit.