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Market Trade Setup 15th October #NIFTY

Market set up 15th October

Third week of the month starts on a different note. Winter is slowly setting in and hope this also brings change in the momentum and the outlook of the market. Friday saw a mammoth rally of nearly 300 points and that has brought us back and erased many losses made. Now we are touching 10500 levels, something we didnt dream of just 3 days ago. US ended on the positive territory on Friday with Dow gaining close to 300 points like nifty and Brent Crude is also at 81.4 dollars which is very tolerable. Asia today is in red due to disappearance of a journalist in Saudi Arabia and the tensions.

On the domestic front, we have a different cues to play with. The inflation numbers have come for the month of September and the inflation is again lower than 4% comes at 3.77% vs 3.69% seen in August and 3.28% seen in September last year. This means practically there is no rise in inflation and RBI’s decision of not hiking the interest rates was right and markets might have to acknowledge this. The only worry is Rupee now and if that stabilizes then things would look rosy. Only worry is IIP that comes at 4.3% but market would like to ignore it on the back of CPI. On the Q2 results front, this week is going to be important with lot of big companies lined up for results.

Following are the Q2 results expected today. 

1. Delta Corp
2. Indiabulls Housing Finance
3. IndusInd bank
4. Network 18
5. Reliance Industrial Infrastructure
6. South Indian bank
7. TV18 Broadcasting 
8. Zee Media

On the derivatives front, there was a massive short covering that was seen as markets was recovering from the fall. Though the buying on the Futures was limited many traders who have taken short positions started to unwind their positions as the markets went up. This was reflected very clearly on the options market where the Nifty put call ratio went up to 1.21 from 1.07 seen at the beginning of Friday. All across there was demand for puts with 10100 put adding 6.1 lakh positions, 10400 put adding 6 lakh positions, 10300 put adding 5.7 lakh positions. The traders are shorting these puts to cash on in the rise in premiums of these puts as markets fell. 10000 put and 11000 call still continue to have highest accumulated open interest indicating there is lot of upside still left.

What is the Nifty call for the day?

Nifty will have a open around 10450 level on the back of a weak Asia, and there is a fundamental of geo-political tension arising with the disappearance of US journalist from Saudi. At the lower end Nifty might test 10380 levels and will get support in 10380-10400levels and on the upside 10500-10520 is a resistance level. You can go long again today when Nifty is below 10450 levels with 10500-10520 or 50-60 points as the target from wherever you take that position.

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