The ninth month of the year is here and we are not very different in feeling that was there in January. We had started January with the worries of growth and elections and now we are in September with the worries of growth becoming deeper and Nifty opened on 1st January at 10881 mark and today we are likely to go there and touch 10880 mark. Yesterday we were not trading due to Ganesh Chaturthi and SGX Nifty lost 110 points and we are now going to open at the same level which means 10880 is a possibility.
Is this the trough from which we will recover is what everyone is asking and nobody has an answer. The US markets were shut yesterday due to labour day holiday and today morning Asia is absolutely flat with Hong Kong up 30 points and Japan up 1 point. Brent crude has fallen two dollars and trading at 58.4 dollars.
Coming to domestics, today we are going to be majorly affected by these factors. The top of the list is the GDP figure that came at 5% and left everyone shell shocked. Even the worst critic was expecting a 5.3% and 5% number is difficult to digest. The manufacturing sector just collapsed from a healthy 12.1% a year ago to mere 0.6% now and that led to fall in GDP.
If you think that manufacturing worries have ended with Q1, they are continuing in Q2 also with Auto sales figures have come at dismal scene. Maruti lost 33% in sales, Tata motors fell 49% and Eicher 25%. This means manufacturing sector is Q2 also is likely to be bad. Adding to this is the GST collections for August which came at 98,000 cr vs 1.01 lakh crore in July. All these will have a big effect in the way we start. Only positive is PSU bank merger.
On the derivatives front, there is no point in taking any cues from the Friday trade because Friday we saw a rally intraday in the afternoon on the hope of economic reforms from FM. The reforms came but the GDP numbers after that has put cold water on everything. There was a FII buying to the tune of 800 Cr in Futures and all this are the thing of the past.
The Nifty put call ratio in options is at 1.31 up from 1.23 for the 5th September expiry. 11000 put added 9.5 lakh positions and it now has the highest open interest on the put side 10900 put also added 8.9 lakh positions and it has the 2nd highest open interest. Today all this might change. On the call side 11300 call added 4.5 lakh positions, 11200 call added 4.7 lakh positions and 11100 and 11200 call both have highest open interest on the call side.
What is the Nifty call for the day?
Yesterday was a holiday and today we are likely to react all the negatives like GDP figures, Auto sales numbers and GST tax collections and we can have an opening between 10920-10940 mark. What happens post this is what we have to see. If Nifty holds 10920 and starts moving up then 11000 mark intraday is possible. If there is further fall on 10950-10980 mark then we could go to 10880-10900 mark where the support might come. If that is also broken then that presents a big reason for worry and we can look for support at 10750.
So, the trade for the day is if Nifty holds 10880-10900 mark then you can think of taking a long position at this level with 10980 as the target. 11000-11020 is going to be a bigger resistance and exit your long positions where ever you take them at these levels