Market setup 2nd January
So the working days start again after a long Christmas and New year and now nearly 80% of traders are back into business today and the remaining 20% will be back by next week. The US markets and Europe were shut yesterday on account of New year and so there are no cues available. Some of the Asian markets like Japan are not trading even today but most of Asia has woken up from the holiday and 2019 for them is not a great start. Hong Kong is right now down more than 600 points and that is the weakest level in the
On the domestic front, we had seen a Happy New Year rally in the last hour of trade yesterday where Nifty had crossed 10900 levels but today is a different day. Asian markets are given a lot of negative cues. Domestically we had the December 2018 auto sales figures that came in and that was not encouraging. It has shown a fall in volumes both in passenger cars as well as HCVs. Maruti, Eicher, M&M and Ashok Leyland will have some negative impact on account of this. The only good news that came in was from the ATF front where Air Turbine fuel was cut by more than 14% and in the last 2 months, we had seen 25% cut in fuel. ATF account for 40% of operational costs for Airline companies and Indigo, Spice Jet might see some positivity. Also, the Airfares might come down by 10-15% in the coming days. Jet Airways has its payment problems with banks to the tune of 14,000 Cr so that stock will have some problems. Crude is still at 53 dollars which is positive.
On the derivatives front, yesterday was a very dull day where we saw 2.1 lakh contracts in Index futures and 4.2 lakh positions in stock futures. On the options side, 88.6 lakh positions were added in Index options while 2.8 lakh positions were added on stock options. 10800 put added maximum open interest positions of 3.8 lakh while 10700 put added 2.8 lakh positions and 10500 put added 2.6 lakh positions. On the call side, 11100 call added 2.5 lakh positions while 11500 call added 1.7 lakh positions. 11200 call and 10500 put still continue to have the highest open interest and 11000 call is close behind.
What is the Nifty call for the day?
A weak Asia means we will open a bit gap down and might open between 10850-10880 levels and 10820 to 10920 is the likely range for today. Things will be dull in the morning but with Europe opening in the afternoon things might change. We might see an up move if Europe opens in positive and then 10920 resistance will be tested again and it might strech upto 10950. On the down side, 10780-10800 which is a 20dma and 200dma is the support that should hold. Breaking this would mean we will go towards 10600 which is 50dma. I am sure you would not have taken any positions yesterday, but if you have taken I would suggest you to exit positions today above 10850 for no profit no loss and wait for the next move. No trading till afternoon.