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Market Trade Setup 12th March #Nifty

What started with India has spread to the whole world and we are now sitting on another day of a gap up opening. Yesterday’s rally for the celebration of the announcement of elections. Most of the traders in the market believe that Modi is winning another term and the 130 point rally is proof of that. After we closed news came in that Theresa May has clinched a backroom deal on Brexit and it will go through in the Parliament now. That was a certainty and was celebrated across Europe, US last night and Asia today. Dow Jones closed 200 points up after 5 days of ending in red and all Asia is in deep green with Japan up 400 points and Hong Kong up 350 points and even Brent Crude also went up and its almost touching the upper end of the 64-67 dollar range, trading at 66.8 dollars.
On the domestics, yesterday saw a mammoth rally of 130 points which is similar to the rally we saw last Tuesday. Nifty has taken out the 11070-11110 resistance mark with ease and the 6th February top has been decisively broken and we are in the new territory now. Today we have the RBI minutes of the meeting on demonetization which says that majority of the board members opposed to demonetization and they argued that most of the black money will be in assets like land and gold and not in cash. In fact, Urijit Patel signed on the order only on 16th December, whereas Demonetization happened on 8th November. But now demonetization is totally forgotten and I don’t think so the market will show any reaction. CPI and inflation data is going to come today at 5.3PM and Feb inflation is likely to harden a bit to 2.3 to 2.5% from the 2.07% mark we saw in January. This is primarily due to low base and slight increase in food prices. The services inflation is likely to be around 5.3 to 5.5%, which is same as January. IIP data is likely to soften a bit more to 1.8 to 2%.
On the derivatives front, yesterday’s rally saw a lot of action on the cash market but by afternoon some selling started in the Futures. The overall long positions in Futures still remains at 52% and the real story comes from the options market where the put-call ratio has jumped to 1.73 from 1.60 mark. The volumes almost doubled to 1.05 lakh yesterday and the turnover was at 6.79 lakh Crores. For weekly series of 14th March 11100 put has 15.3 lakh positions and 11000 put added 7.3 lakh positions and 11000 put remains at the highest open interest and on call side 11150call added 2.9 lakh positions, 11400 call added 2.7 lakh positions and 11300 call added 2.1 lakh positions and 11200 call still has the highest open interest. So, for this Thursday 11220-11240 will act as resistance and 10980-11000 will be the support.
What is the Nifty call for the day?

The position that you took on Friday was the best thing to happen because at the open itself you would have made 100 plus points profit and that would have given you a minimum 100-120 point profit. Today is another day and today global factors will mean that we will open at around 11200-11220 levels which will directly put us in resistance zone. There can be some selling happening at this point which might bring Nifty to 11150-11170 mark intraday and that is a very good opportunity to take another long position with 10220 mark as the target. Even if it doesn’t break 11180 mark also, I suggest you to go long with 40-50 point target on the upside.

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