180 out of 575 points has been covered on a single day as Nifty had a big rally after going to the 50dma and taking support there. Relentless selling that lasted for 6 days has finally come to an end and we are now back into the bullish zone where Nifty took support at 50dma and effortlessly crossed 200dma and closed above that.
Today is a different day and much depends on global and local factors. Globally things are looking bit settled as US markets closed on a positive territory with a 120 plus point gain. Asian markets however are very nervous on news that Trump may put additional tariffs on China, but they are recovering with time and just an hour before we could open Japan is up 100 points and Hong Kong up by 70 points. Brent crude is still hovering in 58 dollar zone.
Domestically, yesterday was the best day of the month with Nifty going up 180 plus points. The main reason was attributed to 5% hike in the DA for Central Govt employees which is expected to push up the consumption and increase the demand. Otherwise, today is going to be a critical day for the market with IndusInd bank and TCS coming up with their Q2 results.
IndusInd bank will declare their results post noon during the market hours and that will give market a view on how banking sector is doing. TCS will declare its results post market closing. On the flip side, we have RBI declining the India bulls Housing Finance and Lakshmi Vilas merger which means India bulls will not have a bank. Technically, Nifty is above both 200 and 50 day moving averages and the next hurdle on the upside will come at the 100dma of 11410.
On the derivatives side, there was selling again in Nifty futures by FIIs to the tune of 109 Cr even as Nifty was going up. Buying by DIIs has kept the futures premium as well as Nifty up. Today is the weekly options expiry and the focus will be mainly on the options. The put call ratio jumped to 1.20 from 0.95 yesterday as there was heavy selling that was seen on puts side. 11250 put added 10.2 lakh positions while 11200 and 11300 put added 8.7 and 8.4 lakh positions respectively.
On the put side 11200 has the maximum open interest closely followed by 11000 put. On the call side there was unwinding of open interest everywhere and 11200 call lost 11 lakh positions in open interest and 11300 lost 7.6 lakh positions. 11500 call followed by 11400 has the maximum open interest on call side. So, expiry range is 11200-11500 mark.
What is the Nifty call for the day?
Yesterday, I suggested taking long position if 50dma holds and if you have done that you would have made money. Today however things are different as trade tension news, Q2 results and expiry factors all of them could play spoilsport in the upward movement, if news is not good.
Today, we are likely to open a bit down below the 11300 mark around 11260-11290 zone and 200dma at 11250 should be the first support and if that is taken out 11180 is a mark that we cannot rule out. So, the trade for the day is, if Nifty holds 11180-11200 mark then go for a long position with 50-60 point target. Yesterday’s high of 11310-11330 mark will be a resistance and most likely Nifty might expire below this mark, unless there is a good news that takes the market to 11400 mark.