Market Trade Setup 11th March
As expected, by the time we entered the 2nd week of March, we have the election dates with us and it’s going to be the nervous 10 weeks ahead with results coming on 23rd May. This news will have an impact on the market and we need to see which direction markets will move now. Globally things are not looking great to start the week with, as there was a disappointment in the jobs data coming from the US and that has put Dow Jones on a flat to negative territory but it was the Asia that started to react from the time Japan opened at 4 AM Indian time. But slowly it’s digesting the data and now almost all of Asia is in flat territory recovering from the opening lows. Brent Crude is still hovering in the range of 64-67 dollars trading at 65.8 dollars now.
Coming to domestics, the announcement that everyone was waiting for has finally come through and we have the announcement of dates for 2019 general elections is finally made. The elections will happen in 7 phases from 11th April to 19th May and the counting will happen on 23rd May. 11th April when the first phase starts is a Thursday and it is an expiry day for a weekly series and 23rd May when counting happens also is a Thursday and will have the 4th weekly expiry of a 5 week May series. We had hit the circuit markers in 2004 and 2009 election days and 2014 election day also saw huge volatility on counting day. So, we need to see how Nifty moves on 23rd May and how expiry will play out, wherein by that time the scenario will be more or less clear as to who will form the next Govt.
On derivatives front, Friday saw some selling in the Nifty futures and we have seen the long exposure in Nifty futures drop from 53% to 52%. On the options front, there was some more correction to Nifty put-call ratio and it’s fallen to 1.60 from 1.68 mark. Last Thursday saw PCR jumping to 1.80 mark. Friday saw Derivative markets cloaking 85.5 lakh contracts worth 5.39 lakh Crores. For the 14th March weekly expiry, 11000 put has the highest open interest of 15.5 lakh positions while 11200 call has a highest open interest at 10.7 lakh positions. So, 11000 put at 40 rupees premium will have the support coming in at 10960-10980 mark and the resistance goes up all the way up to 11210 mark. For monthly expiry, the support and resistance still continue to be at 11000 put and 11500 call. So, this week could take Nifty up to 11200 on the upside and for this month it could go up to 11500 and on the downside 11000 is the support for both.
What is the Nifty call for the day?
On Friday, we have taken positions at around 11020 levels and we are still at no profit no loss zone. Today Nifty will open at 11020-11040 levels and the support will come at 10980-11010 mark and that has the potential to take the Nifty to 11070-11100 mark and Nifty has to break that 11100 mark to go up further. Will the news of elections help Nifty to break that? We have to wait and see. But the moment Nifty reaches 11070-11100 mark it is better to close your long positions and wait for the next opportunity to re-enter. Today your targets might be met.