Two days of consecutive rallies and we are now almost 1000 points up from the 7700 levels that we tested early this week. Its a Friday and a great Friday to look forward to as Dow Gained another 1350 points or 6.5% thus bringing back Dow to 22000 mark from 19500 lows that were made earlier this week. The Fed bonanza of 2 trillion was passed in the Senate with a voice vote and that has contributed mainly to this rally.
Apart from that China is also restarting its economy and that also brought positive sentiment. But on the flip side, US has now overtaken China in terms of Virus cases and has 85,000 cases vs 81,000 for China. 17,000 cases reported in the last 24 hours with 270 deaths is not a positive sign. For now, however, US and Asia are both celebrating the stimulus than virus spread. Brent Crude is still at 26 dollars.
On the domestic front, yesterday saw the FM Nirmala Sitharaman coming and making big relief packages for the rural and marginalized sector to an extent of 1.7 lakh crore. This includes free LPG cylinders, Wheat, Pulses and rice through PDS and direct transfer of cash of Rs 2000 to 8 lakh plus farmers. Apart from that today at 10 AM we will have RBI Governor Shaktikanta Das holding a press meet where he is expected to come out with more sops this time to cater to economy and businesses.
The market will watch this very closely and technically, we are making a bottom around 8000 mark and though Nifty is 700 points above that there is no guarantee that we won’t test again. Bear market rallies are sharp and so are the corrections so we can always expect this level. So, traders should be careful of this while taking their trades.
What to Expect from the April series?
April series is officially starting from today and it will be a long series for 5 weeks and also a series with a lot of holidays. Till the lockdown on 15th, there are 4 holidays on 2nd for Ram Navami, 6th for Mahavir Jayanthi, 10th for Good Friday and 14th for Ambedkar Jayanthi. This series also is starting light with 62% rollovers compared to 3 month average of 72% and with 1 crore open interest compared to an average of 1.6 crores.
The overall long positions in Nifty at the start of the April series is 30% compared to 14% for March. This is the only positive. On the options front, the series is starting at a PCR of 1.42. For 1st April expiry, 8000, 8500 and 7000 put has the highest open interest. On the call side, 9000 call has the highest OI followed by 9500 and 8500 call indicating 8000-9000 to 8000-9500 as the range for this week.
What is the Nifty call for the day?
There is a very strong global pullback that has also kept the SGX Nifty higher and we might actually open 100 points up from yesterday’s close and so we might have an open between 8700-8750 mark and straight away we go to the resistance zone of 8750. Then we have RBI Governor’s meet at 10 AM and I feel that you should listen to it and then take positions.
If after what RBI governor says Nifty remains above yesterday’s close of 8640 then you can take a long position for the day with an 80-100 point target. But if for any reason, after the Governor’s address Nifty goes below 8640 mark then stop and wait for Nifty to stabilize. If Nifty goes to 8500 or below, then abandon all trades and wait for it to stabilize. Today is not the day to carry positions, so trade only if things are positive. Don’t enter before 11 AM and enter only if Nifty is above yesterday’s close.