The re-building process that I was talking about for two days finally seems to have come. But there is no cause for celebrations. Nifty rose by 74 points yesterday but if you see carefully, Nifty gave up 70 points from the top of the day and yesterday was a classic case of intraday volatility where Nifty went all the way to 11104 and to 11294 on the higher end. On global front, US finally recovered some bit after 600 point cut and closed 200 points higher. Asian markets are mixed with Japan and Singapore are in red while other markets are in green. Hong Kong, to which we are correlated the most is up 150 points. Brent crude also went up a bit yesterday and its trading at 71.2 dollars.
On the domestic front, there are two Q4 results that tell two different stories. Nestle, an urban consumption stock reported a decent set of numbers while Pidilite, known for its Fevicol brand, a rural consumption stock came up with a disaster of a number in terms of volumes. Pidilite came up with just 2.5% growth in volumes, while it was expected to grow at 13-14% in volumes. Dabur, TVS, Hero and now Pidilite confirms the rural slowdown and market will surely be worried about this. Another bad news is from Jet Airways, where the CEO, CFO and Chief People’s officer all resigned on the same day and now Jet is practically headless. The worries on Yes bank and the NBFC’s bad assets is continuing, so there is no good news from anywhere to fundamentally drive the market. So, the market will move only on technicals with fundamentals bringing it down. Expect a lot of volatility.
On the derivatives front, there was a huge selling seen in Nifty futures even on a day when Nifty went up 150 points to close 74 points higher. The overall long positions now in Nifty futures came down to 56% from 58% and the Nifty futures premium drops to 18 points with still two weeks to go for expiry which indicates a lot of selling. On options however there was some demand that came back and the Nifty put-call ratio went up to 1.28 from 1.18 mark at the beginning of the day. 11000 put added maximum open interest of 7.1 lakh followed by 11100 put at 6.9 lakh positions and 11000 put still has the highest open interest. Call side saw shedding of open interest everywhere and 11300 has the highest open interest closely followed by 11400 call. So, 11000-11300 is still the range with a possibility of Nifty going to 11400 by tomorrow evening.
What is the Nifty call for the day?
We have seen a good recovery yesterday and you would have recovered a lot from the positions that you have taken. Today also we will have a flat opening around 11220-11250 range with yesterdays 11294 coming as a resistance and the resistance stretches to 11290-11320 zone. It is highly unlikely that Nifty would cross this range. On the downside, 11120-11150 is a support zone on any fall and the trade suggestion for today is to go for a long position only a dip towards 11120-11150 range without breaking it. If it is broken then there is no trade for the day. If Nifty stabilizes at 11220 zones also you can go long and exit before 11300 mark and keep a tight target of 40-50 points only. Nifty is extremely volatile and take positions after careful observation and confirmation