Expiry is done and dusted and nothing really emerged from the Nifty as it moved in the range of 11700-11800 and it expired within that range. So, nothing seems to have changed for the market and still it continues to be bogged down by 11760 resistance mark. On the global front, yesterday was not a great day for US markets and Dow Jones closed 120 points down as the Fed made it clear that there is no chance of any rate cut this year. Asian markets are also in the negative zone today, Hong Kong especially which is down 220 points. But the great news is on Brent Crude which has suddenly dropped to 70.5 dollars which is the lowest we saw in one month. This is going to be positive for India.
On the domestic front, the mixed trend of the Q4 results still continues and MRF which has come up with its Q4 yesterday saw a 15% decline in profit. After the disappointing Hero Moto Corp, yesterday it was TVS Motors to disappoint as the profit declined by 19% to come at 134 Cr. The falling demand in rural markets is quoted to be a major reason. On the FMCG space, Dabur also disappointed after a long time and it is not good news at all, as Dabur is also a rural stock. Today is a very important day for the FMCG sector as two major companies Hindustan Unilever and Godrej Consumer both are coming with their Q4. HUL saw a 5 quarter double-digit growth and this time also we are seeming close to 10,000 Cr worth net sales. Let’s see what happens.
On the derivatives front, yesterday was the expiry and I had forecast a 20-21 lakh crore turnover but what we got was a 22.14 lakh Crore which is almost closer to the all-time high of 22.63 lakh crore seen for April monthly expiry. There are short positions being taken both in the Futures as well as in the options market. In options, there is more demand for puts and that too on the long side which indicates bearishness. The Nifty put-call ratio went up from 1.49 to 1.61 levels. For the May series, the maximum open interest on call side is at 12000 call followed by 12500 call and on the put side, it’s at 11500 put followed by 11700 put. For the 9th May expiry, however, the highest open interest is at 11700 put and 11800 call indicating uncertainty and break on the upside can take Nifty to 11900 and on the downside we can go to 11500 mark.
What is the Nifty call for the day?
As predicted yesterday Nifty took support at 11690 mark and went all the way to 11780 and if you have taken positions at around 11720 mark you would have had just one chance of exiting at 11780 and if you have not done that, you would have been stuck and now you are at no profit no loss zone. Today we can open flat around 11720-11750 mark and if you get your 50-60 point profit you can exit the positions between 11780-11800 mark. There is also a chance of a fresh long trade today, which you can take around 11720-11740 mark with 11780-11800 as the target for those who don’t have an open position from yesterday.