We are back after Dussehra and with the hope that the fall we saw in the last 6 days has finally come to end. This is the period between Dussehra and Diwali and normally the festive cheer, increased buying might induce some strength and there is a hope amongst the bulls that selling is over now and the buying will resume. We have not traded yesterday, but globally yesterday was a weak day on the back of all bad news on trade tensions and uncertainties of global growth.
Entire Europe was in red zone yesterday and Dow Jones also lost more than 300 points. Today morning Asia is in red again on the news of Australian Consumer confidence being lowest in last 4 years. Japan is down by over 150 points and Hong Kong is flat, down by 40 points. Brent Crude is stagnant at 58 dollar mark.
Coming to domestics, the good news of HDFC Q2 results was just short-lived on Monday, and after the noon, markets started to sell off and we broke the 11150 support mark to close at 11110 levels. The next 2-3 days are important as many companies are likely to come up with their Q2 numbers and starting with IndusInd bank tomorrow and if they are positive, we can see some respite in selling.
Technically also, the market has corrected 62% from the highest level of 11695 it reached and this should be the support zone. The 50 dma is located at 11090 levels and we are very close to that level. If that is broken then we are again in complete bearish territory and the journey towards 10700 which is the previous low will resume. So, today’s action is very important to determine the direction of the market.
On the derivatives front, though Nifty lost out quite a bit, there was some buying that happened from FIIs in both futures and options market. FIIs bought close to 650 Cr in futures and in the options market also there was a minor buying which kept the Nifty put call ratio flat at 0.95 vs 0.97 seen at the beginning of the day.
On Monday, 11100 put added 4.5 lakh positions and 11000 put added 2.9 lakh positions and 10900 put added 2 lakh positions. 11000 put has the highest open interest for tomorrow’s expiry. On the call side, 11200 call added 10.9 lakh positions while 11250 call added 5 lakh positions and 11100 call added 4.7 lakh positions. 11500 call though has the highest open interest 11200 call is building up as the resistance for this week’s expiry giving an 11000-11200 range.
What is the Nifty call for the day?
Monday was a bad day where markets after holding 11200 mark till 2 PM lost their way in the last one hour and closed at 11110 levels. This shows that this is a weak market that needs some triggers for it to go up from here.
Today we are likely to open at the 50 dma which is the last support level in the bullish market around 11080-11100 mark and we need to see whether this level holds or not, especially till the last hour. If Nifty holds to 11080 levels till 2.30 PM and after, then you can go for a long position with a small profit of 40-50 points. Otherwise, this is a very uncertain market, which will give hope to you in the morning, only to take it away in the last hour.