Suddenly from an all-time high, we are below 12000 mark now, something which very very few would have imagined would happen. Nifty took the Iran tensions as an excuse to correct, but if you see, suddenly we corrected much more than other markets and look much worse than other markets the way we ended.
European markets ended with cuts of around 0.5%, Dow in fact went up marginally around 70 points but we have corrected almost 2% which is the cause of worry. Is it all due to Iran or is there a sentiment hidden in that, its very difficult to tell. Having said, yesterday’s action was mostly in the F&O market than the cash market, which shows that the revival can happen in a few days. Asia is green today with Hong Kong up 200 points and Japan up 400 points and Brent crude also corrected to 68.5 dollars which are good news for us.
On the domestic front, the advanced estimates of GDP for FY20 will be realised today and the figure that is expected is 5% GDP for FY20 and the GVA of 4.9%. The nominal GDP is pegged to be at 7.5% and if this the figure that CSO is likely to come up with then it will be seen positively by the market but we would see it only tomorrow.
But for today, the cooling-off the Brent crude also will add some positivity to the market and Nifty might track the movement of crude and react accordingly. Any adverse news on Iran front will push the markets into red again and one has to be watchful of that. Technically, Nifty closed below 50 and 20dma and 20dma of 12130 which was support will not be a resistance to overcome and the 50dma will be a support if Nifty opens and stays above that level today.
On the derivatives front, most of the collateral damage to Nifty was done by the F&O market, where close to 850 cr worth positions were sold in Nifty futures market and the overall long positions in Nifty have come down to 48% which means there are more shorts than longs in the system.
In the options market, the Nifty PCR has plunged to 1.11 from 1.37 and it was primarily on the call selling that happened in all strikes from 12000 to 12200. 12100 call added 19.4 lakh contracts, while 12150 and 12200 call added 13 and 13.7 lakh contracts while 12000 call also added 12 lakh positions. 12200 call and 12300 call have the highest OI on the call side and on the put side 12200 put shed 11.1 lakh positions while 11900 put added 6.5 lakh positions and 12000 put now has the highest OI on the put side making it a 12000-12300 expiry.
What is the Nifty call for the day?
Yesterday was carnage in the markets where Nifty fell 230 points and now from above 12200 mark we are now below 12000 mark ending at 11993. The recovery in Asia today and the US last night means we will open gap up around 12050-12080 mark but will the rally sustain or not needs to be seen. 20dma at 12130 is resistance for Nifty and if Nifty stays above 12100 today that would be seen as a positive signal.
So, the trade for the day is to enter back with a long position around 12050-12080 mark with 12130 as the target. There can be some selling coming in around 12080-12120 levels and be patient and hold on to your positions to meet the target.