Yesterday was absolutely flat, maybe because it was a weekly expiry and the positions that were taken expecting Nifty to expire between 11850-12000 did not allow Nifty to fall. Now that the expiry is done and we have another 5 sessions for next week expiry, the market will decide to break this 11850-12000 range either on the upside or on the downside.
Globally things are looking like settled with Dow resuming its upward move after falling for 2 days. Dow closed 100 points up and Asia today is looking mixed with half of Asia in green and another half in red. Hong Kong is in red losing close to 100 points while Japan is in mild green.
On the domestic front, the fundamentals which dominated for close to 6 months is finally over and slowly technicals are taking over the movement of the market. The point to be considered is, Nifty in this series has just lost 0.3% and it’s stuck in the 11900-12000 point range for a long time. This congestion is not going to last and it has to break down and go below 11850 or break 12000 mark and make all-time highs again.
But looking at broader markets like Nifty midcap lost 1.5% and Nifty small cap lost almost 1%. This means we will have a correction in Nifty to align with them or Mid-caps and small caps need to correct and resume the journey upwards. We need to see what is the possible scenario.
On the derivatives front, yesterday was the expiry day and we saw 24.76 lakh crore turnover which is the 3rd all-time highest. The Nifty put-call ratio finally adjusted to 1.47 at the expiry from 1.33 we saw at the beginning of the day. Now all eyes are on 20th June expiry where 11800 put has the highest open interest as 11800 put added 5.4 lakh positions yesterday and the overall open interest is 8.7 lakh contracts.
On the call side, 12000 call continues to have the highest open interest with 10.6 lakh contracts. But the important point to note is 12000 call overtook 12500 call which till now has the highest open interest for June monthly expiry. For 27th June expiry 12500 call has 22.8 lakh contracts and 12000 call has 23.2 lakh contracts.
What is the Nifty call for the day?
Yesterday’s afternoon move from 11820-11920 was purely expiry move and one needs to keep that in mind to see how the market will behave going forward. The options data suggests that 11800-12000 is the range for this weekly expiry series and we are right in the middle of it. For today Nifty will open around 11880-11900 zone and yesterday’s 11820 is the support again.
What we need to see is whether Nifty will take support here and go up. If Nifty drops to 11850 and holds 11820 then take a long position with 11880-11900 as the target. Today is the weekend and it is better to close positions today itself for whatever little profits rather than taking the risk of carrying positions to next week.