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Market Trade Setup 10th January

A mixed trend in the markets as we approach the second half of the week. The Dow Jones continued its growth and has ended up by 100 points while S&P has gained more than Dow Jones in percentage terms. This is on the back of lower than expected inflation numbers which means the Fed rate hike which was looking at a minimum of 3 hikes in 2019 sometime back is now at just 1. The same sentiment is not being shown by Asian markets which are down. Hong Kong is down nearly 200 points and so is Japan which is down nearly 300 points. China is the only market which is in the positive territory. On the Crude oil front, the Brent Crude has crossed 60 dollars and has almost touched 61 dollars, which is now a sign of worry.

On the domestics, there are quite a few fundamentals that are affecting the Indian markets now. The big positive news is the Victory that BJP Govt secured by passing the Reservations bill for EBCs in Rajya Sabha where it doesn’t have numbers. Govt got 165 votes out of 173 present in the house which is the 2/3rds majority that was required for a constitutional amendment. IndusInd bank made an average beginning to Q3 results seasons where the slippages have gone up and even the NII has shown a decline. This is mainly because of the exposure to IL&FS so the market is ready to forgive that. Today TCS will come up with its Q3 results and that will happen only after the market hours at 5 PM. The negative is the Rupee which crossed 70 per dollar again. 

On the derivatives front, there was net buy by FIIs in Nifty futures and thus the turnover went up 30% from yesterday to 24,123 Cr. The options turnover has also increased from 7 lakh crore to 10 lakh crore and we saw an 11.1 lakh crore turnover, which is the highest in this series so far. The Nifty put-call ratio went up marginally from 1.41 to 1.43 mark at the end of the day. On the open interest positions, however, there is not much change as 10500 put and 11000 call still continue to have the highest open interest. We saw only 10900 put adding 2.2 lakh contracts while 10900 call added 1.4 lakh contracts.

What is the Nifty call for the day?

Yesterday’s trade worked perfectly as you would have made at least 70-80 points profit from the positions you might have taken on Tuesday. Yesterday I asked you to stay away from the market and that worked perfectly, the market has almost remained flat. Today we will have a 10870-10890 kind of start with 10920 as the big resistance again. So, there is no trade if Nifty remains in 10880-10920 zone. If there is a drop coming in the afternoon or after 11 AM then wait for a base. If Nifty holds 10820 then take a long position between 10820-10850 zone with 40-60 points as the target. We will have to see if 10920 will be decisively broken or not.