Second week of September is here and its a 4 day week again like the first week. We have a holiday tomorrow and today is going to be a trading day between two holidays. Friday we had markets closing on a positive note on the expectations that Finance Minister will announce something, but nothing of that sort had actually come.
Globally also things are looking bit worrying, as the China exports data had come much lower than expected level. Exports contracted to -1% for August vs growth of 3.3% seen in July. The news had an immediate impact on all Asian markets and they have corrected a bit. Dow closed 70 points up on Friday as US jobs data came lower than expected at 1,30,000 vs 1,50,000. Hong Kong is flat at 40 points while Japan is up 100 points.
On the domestic front, there is nothing substantial that had come from the FM on Friday evening. FM had announced that the spending on the social sector will continue irrespective of the tax collections. This is not a great news for the market. The second announcement is bit more positive which is, the announcement of infrastructure pipeline that would create a demand for the cement and allied sectors.
Other than this there is nothing to talk about and the Nifty will again look at the technicals. Technically Nifty has a resistance at 10960 levels which was difficult to take out. On the lower end, we have the last week low of 10750 which might come as support and then we have the series low of 10647 which could be tested if the level of 10750 doesnt hold.
On the derivatives front, Friday saw some healthy gains happening in the Nifty and that took the Nifty long positions in futures from 20% to 21%. This is still a very low percentage and if we look at the options, things are equally unclear here also. The Nifty put call ratio jumped to 1.31 from 1.24 mark but that didnt change things decisively.
There is a demand for long calls in 60-40 ratio but the shorting is more on call side than on put side which is worrying. 10900 put added 11 lakh positions and now this seems to be forming as the base for this week’s expiry. On the call side 11100 call added 4 lakh positions, while 11000 call added 3 lakh positions and 11300 call added 2.1 lakh positions. For this week’s expiry 11000 call has the highest open interest.
What is the Nifty call for the day?
This is a 4 day week with a holiday coming in tomorrow and for today we are likely to open flat around 10940-10960 zone and that is a big resistance. Does the market has the potential to break 10960 and go to 11000 or not needs to be seen. On the downside 10850-10880 is a big support zone and with a holiday tomorrow, Nifty in all probability might spend the day in 10880-11000 rage and close somewhere in that range only.
So, the trade for the day is to take a long position if Nifty takes support around 10900 mark with 10980-11000 as the target. If you are not getting that chance and if Nifty is unable to cross 11000 mark, then it is better to stay off today and come back on Wednesday to have a fresh look.