Yesterday was a range bound day, where Nifty held onto the 11250 level which is the 200dma and on the upside there was selling seen at 11370 levels. Yesterday was weekly expiry of options and Nifty held onto the range of 11200-11400 which it was supposed to and expired at the mid point slightly above 11300 mark.
Today is the weekend and the cues that are coming from the global markets is mixed. After 2 days of selling, US markets have shown some recovery and has closed 120 points higher. Asia is in a totally mixed zone, as it has opened positively but slowly its losing steam. Both Hong Kong and well as Japanese markets are in mild red with a loss of 100 points and 20 points respectively. The good news is however Brent Crude which still is below 58 mark trading at 57.7 dollars.
On the domestic front, we had a positive start yesterday and as Nifty hit 11370 mark there was selling that brought Nifty back to the lower levels. The bad news of trade data has impacted the markets a bit. Today is an important day as monetary policy committee will come with recommendations during market hours at 11.45am.
If there is a rate cut as everyone is expecting, then it will the the 5th consecutive rate cut that we will see. A 25bps rate cut will not impact the market much but a 40bps cut can have a big impact as it will bring repo to 5%, which will be the lowest in last 8 years. Technically also the 100dma of 11400 will be the resistance that market needs to watch out for and any negative in MPC might take Nifty to 200dma again and we need to see if it finds the support there or not.
On the derivative front, though yesterday was the weekly options expiry, but the focus was on the futures. There was a big selling from FIIs in Nifty futures and that brought the Nifty premium down to 48 points from 70 points at the start. There was a net selling of more than 1068 Cr by FIIs in Nifty futures and that brought the overall long positions to 34% from 37%. On the options front, the Nifty PCR has climbed to 1.17 from 0.96 as the options chart moves to 10th October expiry.
On the options front, 11300 put added 6.5 lakh contracts while 11200 put added 5.6 lakh contracts and 11200 put has the highest open interest on put side. On the call side 11500 call has the highest open interest and yesterday 11400 call added 9.4 lakh positions and 11500 call added 8 lakh positions respectively.
What is the Nifty call for the day?
Yesterday, we have defended the 200dma of 11250 for the 2nd time and Nifty closed above 11300 mark which is a positive sign. Today, we are likely to have a flat opening around 11310-11330 mark and 11380-11400 is a resistance zone that is difficult to breach, unless we have very positive news coming from RBI.
So, the trade for the day is to go long at the open around 11320-11340 mark with 11380-11400 as the target whenever it is achieved before monetary policy. If you dont get the opportunity initially, then wait for a dip before going long. If the RBI policy is negative, exit all trade and dont try for any positions as it could be extremely risky. 11250 mark will be a support that Nifty should hold and we need to see where it closes. Go intraday and dont carry your positions to next week.