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Nifty Trading Ideas

Market Trade Setup 14th September #Nifty

The last day of the 2nd-week approaches and what a week it was. There were only 3 trading days so far and first two days saw markets falling nearly 300 points and Wednesday saw a recovery of around 80 points.  Global markets were bullish yesterday when we were not trading and Hong Kong went up more than 600 points and Dow Jones last night went up nearly 150 points. Today also Asia is trading in green and most India is looking like opening with a big gap up.

On the domestic front, the big news on Tuesday evening post market hours was IIP and CPI data which came almost as per the expectations. CPI inflation came in at 3.69% which is much lower than 4.1% seen in July. This was primarily due to the drop in food inflation especially the vegetables. I had expected that in my Wednesday post. Food inflation came at just 0.2% compared to 1.3% seen in the previous month and vegetable inflation came at as low as -7%. IIP also meanwhile has come at 6.6% for July which is marginally lower than June IIP of 7%. The big factor on Wednesday was the rupee recovery. Rupee at one point went all the way up to 72.91 before recovering to 71.86 and closed at 72.18. Crude also came back sharply after touching 80 dollars and now trading at 78.3 dollars. This will bring some positive sentiment to start with. 

On the derivatives front there was selling happening in Nifty though markets went up yesterday. The overall long positions in Nifty now stands at 43% down from 44%. But there is some good news on the options front where the nifty put call ratio went up from 1.24 at the beginning of the day to 1.29 at the close. 11200 put has added 3.6 lakh positions and on the call side 11400 call added a maximum of 2.7 lakh positions. Now 11400 put still continues to hold maximum accumulated open interest of 41.4 lakh positions and on the call side 11800 call has 43.4 lakh positions. So at 110 premium 11290 and at 10 rupees premium 11810 are the floor and the roof for the market respectively. 

What is the Nifty call for the day?

A green Asia and missed out trade means we will open gap up almost 80 points at 11450 levels and from there 11500 is a huge resistance. On the downside 11380 might act as big support. I suggest you go long if NIFTY drops below 11400 levels with 11450-11480 as the target. This trade can be taken before 9.30 or anytime in the trade or after 3 pm. If taken after 3 pm consider taking the position to Monday.

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