A gap up opening around 9910-9920 expected today. Again the count down to 10,000 will start and maybe today we might see 9950 at some point during the day. That means we are in for 10,000 probably this week itself. Keep building portfolios and wait patiently. The journey that started 10 days ago at 9600 has taken you to 4% plus levels and if you stay on you can look at 10,000 getting crossed. Lot of put writing is happening at 9800 and 9900 levels and that shows that 9800 is emerging as a strong support. The put call ratio is at 1.5 which is a multi year high. We have seen that last in 2008. That time PCR went to 1.98 before having a big fall. Now it has reached a dangerous level of 1.5.
Why is high PCR bad? It means market moves slowly in one direction and you can eat put premiums easily and that increases PCR. 1.5 means puts are 50% more than calls and that is not good for the balance of the market. If money making becomes easy that too on short side it means market is thinking of something else. It is just trapping the people to keep shorting and suddenly there can be a reversal which might taken many by surprise. Today’s caution is PCR reaching 1.5. Will there be a call buying to offset that or will people continue to short puts and keep eating premiums we need to see that today.
Today’s fundamentals includes the China’s GDP data that comes at 6.9% vs estimated 6.8% for Q2 of 2017 fiscal. In Q1 also the GDP was 6.9%. Now China is inching back to its 7% growth rates. The IIP data for China in June also comes at 7.5% which is a good 1% higher than 6.5% seen in same month in 2016. China is an industrial economy and manufacturing is picking up again in China. Meanwhile in India, ACC and Jubilant food works are coming up with their Q1 results today.
Fuel Prices in important cities today 17th July
There has been a 10-12 paise increase in petrol and a 14 paise increase in Diesel prices today compared to weekend. So a costly monday for all those filling their tanks.