Markets and News
After a lot of promise of starting off on a positive note, Nifty has disappointed by a big fall early in the morning and closed in Red. US is continuing to be positive and Dow gained another 180 points in the trade last night. It was on the back of fresh all time highs hit by Apple and Amazon. Practically speaking Apple, Amazon and Microsoft together account for 50% of India’s GDP in terms of market capitalization. The Asia is however mixed with the worry that US is growing very strong and that in the practical sense not very positive for the emerging markets.
Domestic Cues
On the domestics, Crude has shown decline further and last night it went below 75 dollars and now it is around 75.20 dollars and that means we can have further drop in the Petrol prices in the coming days. That seems to be the only positive as we have to deal with lot of negatives. The banking scandals have now started hitting even private banks like Axis bank and ICICI. The RBI is going to come up with the credit policy tomorrow, and Governor Patel advised the Fed Governor not to go for too many rate hikes as it will push up inflation and might hurt US in the long run. It shows how worried he is with the interest rates rising that will take away FII money from India.
Derivatives Action
On the derivatives front, the net long positions go to another series low of 40% with so many shorts getting built up in the system as Nifty started to fall 100 points in the first hour of trade. The options market also has showed a considerable increase in the short calls and that has pushed the Nifty put call ratio down to 1.38 from 1.49 and at the beginning of this series it was close to 1.6. 10700 saw 9.8 lakh positions as the premium was over 100 rupees and the traders wanted to eat this. 10800 call also saw 5.3 lakh positions and 10900 call at 50 rupees premium saw 3.5 lakh positions being created.
What is the Nifty and bank nifty call for the day?
The mild Asia means, we will start flat to negative around 10600 level and we need to see if it protected or not. 10550-10570 is a support zone and it is better to take a long position between 10550-10600 wherever Nifty corrects to for a small intraday target of 10650. Take the positions only if Nifty stabilizes between 10550-10570 zones and exit as and when the target is reached.
On the bank nifty front, it is weaker than Nifty and wait for my tweet during the day to see if we can buy a put on the bank nifty.