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We are close to 10500 now, the next question is what next? A 5% up move in April and a 7.5% up move in May series during the expiry week now we have roughly completed a 4% rally this week and 5% would take it to 10600 and 7.5% would take it to 10900 mark and am only telling the possibilities from the past 2 months.

Globally, things are looking fine, Dow Jones is up 130 points even though there is a risk of 2nd wave of Corona but markets are taking into consideration of the fact that another lockdown won’t be needed, so they are maintaining their uptrend. All over the world, central banks are pumping in liquidity and keeping the markets up and we need to see how long this will go. Asian markets today are trading in the flat zone with Hong Kong down 1 point and Japan up 10 points. Brent crude corrected a bit from 43 dollars and trading at 42.3 dollars now.

Domestic Cues

On the domestic front, it’s the global factors that will move the market along with the technicals leading to the expiry to it makes more sense talking about technicals. Today is the penultimate day of expiry and we will see the trending move of expiry today in the last hour of trade. 10500 is considered to be a resistance mainly due to 61.8% fib retracement and we need to see whether it will hold or not. In May the 50% retracement was held, so we might hold 10500 for the series.

On the downside, 100dma of 10075 will be a support if Nifty reaches there. On the upside, if 10500 is taken out then Nifty can go all the way up to 10900 which is the 200dma mark. For this to happen, Nifty needs a sharp upmove and the global momentum is not that strong. So, I would still bet on 10100-10500 expiry mark, with a 50% probability of Nifty going to 10600 mark.

Derivatives Action

On the derivatives front, there was buying seen in Nifty futures ahead of expiry and the rollovers are also going up as Nifty rollovers for July going to 38.22% from 27% seen till Monday. The action, however, is in the options space where the Nifty PCR jumping to 1.61 from 1.53 mark at the beginning of the trade.

There was unwinding seen at many strikes on the call side and we had 10550 call added 3.4 lakh contracts while 10650 call added 2.4 lakh positions and 10500 still has the highest OI on call side with 36.1 lakh open positions followed by 11000 call with 30.9 lakh open positions. On the put side 10400 put added 17.4 lakh positions while 10300 put added 10.9 lakh positions fortifying these levels. 10000 put still has the highest OI pf 46.4 lakh contracts followed by 10300 put with 28.8 lakh contracts indicating 10000-10500 expiry range.

What is the Nifty call for the day?

A flat Asia means we will open around 10450-10470 mark and then we will have to see if Nifty has the ability to cross the 10500 mark. It is a very tough mark to overcome and the fall also might not be much. But if 10400 is taken out then we can expect a lot of volatility.

Trading volatile markets is always risky and I suggest you stay away from trade today. 10400-10600 can be the range but I really don’t know how Nifty will negotiate that, so I would prefer keeping out and watching which way Nifty will close.