Its weekend and next week are going to be the budget week. First time ever we are going to have 6 full trading days next week and what move Nifty is going to have for the budget will be decided today. Yesterday we had a rally, which is partly due to expiry factors as well as due to lower crude.
Today also we have Brent crude exactly at 62 dollars and it may break 62 and go below during the day and if that happens it will be seen more positive. Coronavirus continues to be in the news with it spreading to newer countries like Vietnam and Dubai and India so far has not been affected by it. The US closed flat last night on the fears of Coronavirus and China is going to be shut till 31st due to Chinese lunar new year and the markets that are open Japan and Hongkong are also flat.
On the domestic front, Q3 results continue to be in the news and so is the budget. The biggest result that is expected is the ICICI bank tomorrow and whether there will be a rally before the budget or there will be a sell-off hugely depends on the results of the ICICI tomorrow, but the market will react to it in the last hour of today itself. 50dma of 12100 was protected yesterday also and unless there is a problem with ICICI 50dma looks to be protected.
So, I can say that if there is no Corona scare in India and if there is a positive ICICI result tomorrow then next week we can see a pre-budget rally that can take Nifty to close to an all-time high of 12400 by the budget day. But if ICICI disappoints then you can see 12000 levels first and then a break towards 11800 is possible.
On the derivatives front, there was selling seen in Nifty futures to the tune of 430 Cr and that resulted in Nifty long positions to come to the series lowest level of 45% and the Nifty premium also shrunk to 20 points from 38 points seen at the beginning of the day. However, the big news is another all-time high expiry turnover seen yesterday. Yesterday we had 34.44 lakh crore turnover which surpassed the previous high of 33.6 lakh crore.
The Nifty PCR which was at 1 at the start of the day, closed at 1.31 and now we have the monthly expiry and for that 12200 call and 12500 call added 1.4 lakh positions and surprisingly 12500 call has the highest OI on call side indicating a very strong possibility of a pre-budget rally. On the put side, 12000 put added 5.8 lakh positions and it has the highest OI on put side indicating a 12000-12500 expiry range.
What is the Nifty call for the day?
Yesterday we have seen a recovery and it is a welcome move. Yesterday’s market move also indicated that the fall has ended and the 50dma of 12100 is protected. Today we are going to start flat, probably from where yesterday ended and today if everything is fine, we have the potential to touch the 20dma of 12220.
ICICI bank results coming tomorrow are crucial for markets and only the positive news on this can take Nifty past 12220 mark. So, the trade for the day is to take a long position around the 12150-12170 mark around the open with 12220 as the possible target for today. If you see a rally in the last hour risk carrying your position to next week as the pre-budget rally can commence if the ICICI result is good.