Markets and News
The last week of May series starts on a positive note. There was a flat to negative close on Friday in US market and Dow lost 58 points. But that will not be a trigger today but what happened during weekend is important. Oil prices across the World have suddenly come down on the news that the top three oil supplying companies coming up with the news that they are planning to increase the supply on the growing demand. That has pushed Crude prices down and from close to 80 dollars Brent lost 5 dollars and now its trading at 74.8 dollars now. Asia is in the green now and that is a good news.
Domestic Cues
On domestics, there are quite a few fundamentals to look at. Bypolls for 10 assembly segments and 4 lok sabha seats today and their results will have a big impact. Any losses here means BJP will lose the majority mark of 272 in Loksabha. Another fundamental is the monsoon which is likely to hit Kerala according to met department as early as tomorrow. That will be the good news for the market. Plus there are some last set of Q4 results that are going to come today. First is L&T which will come up with numbers and apart from that PSU companies like NTPC, NMDC and oil marketing companies like IOCL will declare their Q4 today.
Derivatives Action
On the derivatives front, there was a massive buying that happened on the Nifty futures on Friday but the selling still continues as Nifty is inching higher. That has put the Nifty long positions at 47% which still means that there are 53% short positions. However in the options market puts are in demand and Put call ratio surged to 1.47 from 1.29 levels seen on Friday morning. The puts that are in demand are the 10500 and 10600 put where the positions went up as nifty was going up. 10700 and 10600 call saw some unwinding.
What is the Nifty and Bank Nifty call for the day?
The lower crude and positive Asia means we will have a slightly positive open around 10630-10650 zone and what happens from there needs to be seen. Remember that series high is 10930 and technically nifty has legs to go there. But 10800 will be a strong hurdle and for this series a long position now taken below 10650 with a target of 10720 can be taken. A hedge for that I would be suggesting during the course of the day.
Bank Nifty will be at 26300 and another long position there with 26500 is something you can look at, with some tight stop losses.