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Market Trade Setup 31st January

Finally, the expiry day to the longest series which had full 25 trading days is finally here. We have started the series almost at 10800 level and now we are 128 points down for this series. Will this first series of 2019 goes to bulls or bears needs to be seen. Last 2 January series was very positive with over 500 point gain, so in that way, this is going to be a bit of a disappointment. Globally things are looking bright as US jobs data showed some positivity and Fed also said that it would be “patient” in looking at rate hikes. That pushed markets up and Dow gained 400 plus points. The Asian markets are in green with Chinese manufacturing data coming slightly better than expected. 

On the domestic front, the big relief came for the market yesterday with ICICI bank coming up with a good set of results in Q3 and that augers well for the entire banking sector. Added to that was the Sri Krishna committee report that said Chanda Kochhar was at fault and she broke the code of conduct of the bank. Immediately the ICICI board distanced itself from her and sacked her and took away all her post-retirement perks and bonuses. But with no adverse financial implications on the bank because of the fraud, it’s a huge sigh of relief for the bank. Today Apollo Tyres, Airtel, Dabur, Dena Bank, Emami, Hero, India bulls housing finance, Petronet LNG, Power grid, Vedanta and V guard are coming up with their Q3 results.

On the derivatives front, today is the expiry day and if we look at the moves yesterday there was a massive selling on Nifty futures as the market was going up and from 13 point premium, Nifty Jan futures moved into the discount. Yesterday there was a lot of action on Index options and we saw 8.98 lakh crore turn over there itself and the total F&O turnover was 11.19 lakh crore. So, as I said the turnover has crossed 10 lakh crore. Today we might see it crossing 16 lakh crore. The contours are now placed at 10600 put and 10580 is a strong support and on the upside 10800 call has the maximum open interest and so today’s broad expiry contours will be 10580-10800 which is a 200 point range and Nifty put-call ratio is at 1.20 and that means there can be some movement over 10700 for Nifty today to make the PCR adjust upwards.

What is the Nifty call for the day?

Yesterday, I asked you to take long positions if Nifty goes to 10620 mark and if you had taken then you would be sitting on a mild 20 point profit. Today there will be a gap up open for Nifty between 10700-10720 mark and when that is reached you will have an 80-100 point profit. This is your final bonanza for the series and exit around 10700-10720 mark and book profits. 10720-10750 will be the resistance zone so don’t take any risk. On the downside, 10650 will be the support and I would expect the expiry to happen anywhere between 10680-10750 mark with a mild 3 PM move. We have already seen the 3 PM move yesterday also so don’t expect anything great. Be safe and tomorrow onwards we have a lot of cues to deal with including budget so keep your money safely in your pocket.