Markets and News

Finally markets closed within the range I was suggesting above 10200 and below 10250. So for now things are looking as if the negativity is taking a back seat. Trump and North Korea are meeting, the Aluminium import tariffs are for everyone except Canada and Mexico which is considered to be a very big positive for North America. All that meant Dow Jones closed 100 points above and it is very close to 25000 mark. Dollar went up in the second half of the day to cross 90 mark but brent crude fell below 64 dollars and that means things are looking bit positive.

Domestic Cues

On the domestics, things are looking okay in India with no major fundamentals affecting the market and only technicals ruling the market. Nifty has successfully defended the 200dma moving average and went up sharply from there. That means we now have a band between 200dma and 100dma which is 10150 to 10450 and Nifty is close to 10250 levels which leaves some room for it on the upside. The bank Nifty also has continued its journey upwards and now its looking like catching up with the 200dma. What needs to be seen is whether bank nifty will have the power to break the 200dma or not needs to be seen. The bank nifty breaking 200dma would mean nifty will get the power to break the 100dma and move up.

Derivatives Action

On the derivatives front, some buying is still seen in Nifty futures and the overall long positions are now at 49% as the upward move seen yesterday from 10140 levels to 10240 seeing some short covering. In the options front, there has been a massive unwinding of short positions at 10600 levels seeing the rally yesterday and a whopping 15.9 lakh positions were unwound there. These positions were taken with an expectations that Nifty will not cross 10620 and now they are feeling jittery seeing 100 point rally. The focus has shifted towards puts now with 10000 put adding 10.7 lakh contracts while 10100 put added 5.5 lakh contracts and 10200 put adding 3.4 lakh contracts. That pushes the Nifty put call ratio again to 1.14 from 1.09.

What is the Nifty and bank nifty call for the day?

The positive closing in US and the positivity seen in Asia today means Nifty will open bit gap up above the resistance level of 10250 close to 10280 levels. If you had followed my advice and had taken a long position around 10230-10240 levels yesterday you would start with some profits. Now you can take a target of 10330-10340 which is exactly 100 points. This target can be met today or even next week so it is better to wait. In my view Nifty is heading to the upper end of the band which is around 10450 levels. It might not be a linear journey so step by step targets will help.

On the bank nifty front if you had similarly followed by advice to go long around 24250 level you would have met your target. Now its time to go long as soon as it opens around 24550 levels with 24750 as the target to be achieved today or next week. But unlike yesterday, today will be more for nifty than bank nifty.