Nifty gave up nearly 80 points out of 180 it gained the day before and that’s how the weekly expiry day went yesterday. Things are not as bullish as the day before yesterday’s rally gave, which means that the upwards journey is going to be slow but not steady. We will see a lot of ups and downs and sharp moves on either side. Globally, things seem to be settling down as there is an expectation of a deal on Brexit likely to happen.
The trade tensions between US and China seem to have relaxed for the time being and today we have the Chinese President landing on the shores of Mahabalipuram for an informal meeting with Modi, which can also add some positive vibes. Dow closed 150 points higher and Asia is green today with Japan and Hong Kong are both up 300 and 400 points respectively, giving positive signs for us.
On the domestic front, things are not as good as they are global. Q2 results calendar started on a weak note with both IndusInd bank and TCS reporting below par numbers. TCS has a major miss on revenue growth which came in at just 1.6% and it is primarily on the back of slowing BFSI and retail markets in the US and Europe. For IndusInd bank, the major problem is the loan growth which has remained stagnant at just 5%.
Today we have another IT major Infosys declaring its numbers and any miss here means the IT sector is going to be in problem. Today the IIP numbers are going to be out and we are expecting a mild number around 1.5 to 1.8% for August. Technically, we have broken the 200dma yesterday and closed below that. So, today its going to be a test at that level and we need to see if Nifty can regain that or not.
On the derivative front, yesterday’s expiry happened on heavy turnover of 25.59 lakh crore and now we are consistently touching the 25 plus lakh crore for every expiry. On the futures front, there was selling of 263 cr by FIIs in futures and that again brought the overall long positions in Nifty futures to 32% from 34%.
On the options front, the Nifty PCR for the 17th October expiry is at 1.15 vs 1.20 we saw for yesterday’s expiry. 11100 put added 3.1 lakh positions while 11000 and 11200 put added 2.9 and 2.6 lakh positions each and 11000 put has the highest open interest for 17th expiry. On the call side, 11300 cal added 5.7 lakh positions while 11500 and 11400 calls added 5.2 and 5 lakh positions each and for now 11300 call has the highest open interest for the 17th expiry. So, the range is 11000-11300.
What is the Nifty call for the day?
Yesterday, we had a down day with Nifty going below the 200dma mark. Today we have positive global markets and that means we are likely to open between 11230-11250 levels and the 11270 which is the 200dma will offer immediate resistance. We need to see how much time it will take for Nifty to break it. If it manages to do that in the morning then we can go to 11320 mark which is Wednesday’s highest level.
So, the trade for the day is to go for a long position around 11250 mark with 11300-11320 as the target. If Nifty is unable to break the 200dma till late afternoon then I suggest you to close the positions at a reasonable level, don’t risk them carrying it to next week.