A very good weekly expiry and Nifty is up 100 points after a long long time and looks like our re-building process seems to be working well now. If you see the performance of Nifty this week Monday saw a triple-digit fall at 130 points, Tuesday saw double-digit growth at 70 plus points and then Wednesday saw a 60 plus point fall and finally, yesterday saw a triple-digit gain of 100 points. So, now we are going to be on our way up and election results are scheduled in the next 4 trading sessions. Globally also things are looking bright with Dow Jones gaining 200 plus points and Asia today is however mixed with some markets like Korea and Japan in green while Hong Kong and China in mild red. Brent crude is again on its way up and crossed 73 dollars to trade at 73.2 dollars.
On the domestic front, today will be the last trading day before the exit polls and the final phase of polling will happen for the remaining 59 seats in the states of Punjab(13), Himachal Pradesh(4), UP(13), Bihar(8), MP(8), Jharkhand(3), West Bengal(9) and Chandigarh(1). Kolkata goes to polls in Bengal and this is where BJP and TMC and directly fighting and Prime Minister’s constituency of Varanasi also goes to polls. BJP holds 36 out of 59 seats and would want to consolidate a bit here. The exit polls will be out by Sunday evening and markets will be ready to react to them on Monday. In all this Q4 results are now turning to be positive and that should come as some relief. The two main irritants however are the Jet Airways mess and Yes bank issue which will continue to worry markets next week also.
On the derivatives front, we had a tepid expiry yesterday as everyone is waiting for the blockbuster May 23rd Expiry when the actual results will be pouring out. The turnover was less than 20 lakh crore at 19.68 lakh crore and it went all the way till 11290 mark which is where the maximum options positions are stacked. On the futures front the buys and sells were almost same and the overall long positions still stand at 55%. For the May 23rd expiry interesting cues are emerging and the premiums are more than 200-250% costlier than the usual value. For 23rd expiry 12000 call has maximum open interest while 11500 call has the second highest open interest. On the put side 11200 put has highest open interest followed by 11000 put. So, 11200 is the base for the market and it can go all the way upto 12000.
What is the Nifty call for the day?
Yesterday was a good day for us, where all our previous targets are met as Nifty went into 11280-11300 range and you would have exited the long positions that you have taken. Today is a very critical day as it is the last day of trading before the Nifty will start reacting to the exit polls. So today is a very good opportunity to go long before the exit polls. Nifty will open flat between 11250-11280 zone and now we have next resistance coming at 11500 mark and the support is at 11220-11250 zone. So, in this zone we can go for buying Nifty futures or buying the 23rd May expiry call options. The targets for futures can be on the intensity of exit poll results for BJP. We need to be prepared for a lot of volatility and risk, if exit polls dont give a win for BJP. So, take positions only if you are willing to take that risk.