Market Trade Set-up 4th July
Budget is just a day away and we had a nervous day yesterday where Nifty went all the way upto 11945 to correct back to 11900 and then close just above that. Globally things are looking green as the fall in the yields is boosting the markets over there. US 10 year is at 1.95 now and might slip to a 2 year low soon. Result is Dow closed 180 points up and Yields across Europe, Australia and Asia are falling and that in a way is helping the markets. That is the reason we see a lot of green across Asia today with only Korea in mild red. Hong Kong is up more than 100 points while Japan is mildly in green up by 70 points. Brent crude is at 63.4 dollars and Rupee has strengthened a lot to reach 68.91 to dollar and that is something we have not seen for a long time.
Coming to domestics, the big news today is the annual economic statement that will be tabled in the Parliament at 12 noon today and that will give some indication to market as to how Indian economy has performed in the last year. As this survey is coming after the close of the financial year we will have the complete picture of all the sectors, which is good. Another trigger is the Q1 results starting from next week and it is assumed that we will have an average 9% growth and consumption and manufacturing sector might see some pressure. Technically market looks strong as 20dma is firmly protected and yesterday’s high of 11945 might present a small resistance. If its overcome then we will be touching the 12000 mark.
On the derivatives front, yesterday’s flattish market has brought some shorts into the futures market and in the options market more calls were in demand than puts. The turnover itself was mild yesterday and after many weeks the turnover yesterday went to less than 10 lakh crore, was at 9.8 lakh crore. So, today I doubt we will touch the 25 lakh crore mark. The record is 26.83 lakh crore. Yesterday 12000 call added 10.6 lakh positions and now its all looking like a 11980-12020 kind of expiry. On the put side 11900 put added 3.8 lakh positions, while 11950 put added 3.2 lakh positions but 11800 put has the highest open interest for this expiry. 11900 is also adding a lot of open interest and might end up as the highest by the end of the day.
What is the Nifty call for the day?
Today is the weekly expiry for the Nifty as well as the pre-budget day and with so much news coming on the budget front, there can be a move forward for Nifty. Normally many long positions will be taken before the budget day which means you will get some upside if you have positions open for today.
We are likely to open flat around 11910-11940 mark and we will encounter the first resistance at 11940-11960 zone and if that is taken out we can see a 12000 mark on Nifty today. By any chance Nifty sees a correction we will find support at 11880 mark. If you have positions, keep a target of 12000 for a decent profit. If you dont, then take a long anywhere between 11900-11940 with 12000 as the target. Going long is the story for today.