Market Trade Setup 7th March #NIFTY

Market Setup 7th March

If you see last two days, India and the other markets seem to be operating in two different Universe. India has been rising and last two trading sessions saw close to 200 points gain in Nifty whereas other markets in the World was either in red or flat. Dow Jones had another red day yesterday with Dow correcting more than 130 points making it 3 consecutive days of fall. The main news is the Trade deficit seen in US and that is widening now to 60 billion dollars.  Asian markets are also in red with Hong Kong losing 100 points and Japan losing 150 points. Brent Crude is still in the range of 64 to 67 dollars trading at 66.5 dollars now. 

Coming to the domestic scenario, the war noise is reducing and the issues that were at the back burner are slowly emerging out. Rafale is back again with Govt making a sensational claim in Supreme Court that the key papers on Rafale deal were stolen from the Defence ministry and they appeared in some news papers like The Hindu and Govt is contemplating action under the official secrets Act. Congress went on offensive with Rahul Gandhi asking for an FIR to be filed against Prime Minister Modi. Now all eyes are shifting towards Election Commission for declaring the dates of elections and putting moral code of conduct in place. 

On the derivatives front, there has been a lot of buying and short covering seen in the Nifty futures. Two short were covered for every long taken in Nifty futures and that brought the Nifty overall long positions to 52% which is the highest in the series. However the reason for worry is Nifty premium which was at 62 points at the beginning of series is now at just 34 points. In options also the Nifty put call ratio went upto 1.80 from 1.76 and this is over heated zone and India Vix moved to 200dma which means it has to rise. If Nifty put call ratio has to fall and Vix has to rise means market should see some dip. So, derivative marks indicate a correction in Nifty now. Today is the weekly expiry for Nifty and the open interest is highest for 11000 put which will act as support and 11100 on call which will act as resistance. So, today’s expiry markers are placed at 11000-11100 mark. 

What is the Nifty call for the day?

Today we will open flat to negative between 11040-11060 mark and as the expiry markers indicate we might find support at 10980-11000 mark and on the upside 11060-11090 will act as a resistance. Yesterday also, after opening gap up, Nifty couldn’t move more than 30 points offering no chance for you to trade. Today also things might be the same and there is no concrete long trade possible on Nifty. But for those compulsive traders, today’s expiry might offer a chance and wait for my tweet today morning after Nifty settles down to see if you can take a trade in the options market.

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