After a long weekend of 3 days, we are back to trading again and there is nothing much that has happened in the last 3 days globally or domestically. Friday ending was positive on the hope that there would be something concrete that would be announced on FPI taxation. But so far nothing concrete has come out of the Govt.
Since Govt is neither positive nor negative market will wait for some more time before reacting negatively or positively. Globally things are not looking fine with concerns on growth and trade wars dominating the market sentiment. The shutdown and protests in Hong Kong are also not helping the Asian markets. After near 400 points negative close of Dow Jones, Asian markets are trading in red with Hong Kong losing 350 points and Japan down 250 points. Brent Crude is below 60 dollars trading at 58.4 dollars.
On the domestic front, the big news came yesterday from Reliance in its 42nd AGM. In the AGM, Mukesh Ambani made some path-breaking announcements which will go very positively for the markets. First, is India becoming a 10 trillion economy by 2030 and emphasizing that this slow down is temporary and the economy will recover soon.
Second is the largest FDI investment into Reliance petrochemicals which is planning to offload 20% stake to a Saudi Arabian oil firm. Also, interesting announcements made on the launch of Jio Fiber on 5th September and making Reliance a debt-free company in next 18 months also will be taken positively. On the technical front, Nifty is at 11109 and 200dma is at 11170 mark and the 20dma is at 11230 and this is going to be the new congestion zone for the Nifty from now on.
On the derivatives front, for the first time in 28 trading sessions after 1st July, there is finally some buying coming up from FIIs. FIIs bought close to 300 Cr in the market on Friday and if Govt lives up to its FPI taxation cut promise, buying will increase and the turnaround can start happening from here. The Nifty put-call ratio was more or less stable at 1.24 vs 1.21 and this is a short series that began on Friday and will conclude tomorrow.
11100 put added 12.3 lakh positions on Friday and 11000 put added 6.8 lakh contracts. On the call side now 11000 put has the highest open interest making 10980 as strong support. On the call side, 11200 call added 10.8 lakh positions followed by 11300 call that added 6 lakh positions. 11200 call has the highest open interest on the call side.
What is the Nifty call for the day?
Though globally things are looking weak today, the positivity induced by Reliance will have our markets on the positive side. Nifty will open flat around 11100-11120 mark and on the upside 11170 which is the 200dma is a resistance. Whether there will be selling at 11170-11190 mark or not needs to be seen. Till the time Govt decides something concrete on FPI taxation, breaking 200dma is looking difficult.
So, my trade for the day is if the positive news of Reliance takes the markets to 11170-11180 zones then you can initiate a short position with 11080-11100 as the target. The options data also suggests 11000-11200 as the lower and upper end for this series expiring tomorrow so Nifty will find it tough to cross 200dma unless there is strong fundamental news and that could only be the announcements on taxation by Finance minister.