Friday, as expected saw a correction but it was not deep. The 10750 levels are protected on Nifty and that means the base formation on the downside is forming at 10000 and it looks highly unlikely that Nifty will go below that mark in the near term. On Friday, the global cues were positive with Dow Jones gaining 350 plus points and all this is driven by the liquidity available freely in the market. Most of the worries related to COVID are put behind even as the 7 day average of cases is at 53,000 now.

The fact that lockdowns are the thing of the past and we are approaching the end of the virus has brought this cheer. Today morning Asian markets have picked up the cues from the US and all the Asian markets are trading well in green with Hong Kong up nearly 150 points and Japan up nearly 400 points. Brent crude is stable trading at 42.8 dollars.

Domestic Cues

On the domestic front, the big news will be Reliance which is going to get its 13th investment in 12 weeks as Qualcomm, the telecom manufacturing giant is investing 0.13% or close to 770 crores in Jio platforms. Apart from the finances, the big advantage for Reliance will get is the advantage in rolling out 5g network. Apart from this, its the global factors that will influence the markets today and today in all likelihood the 200dma of 10885 will be the target for Nifty today.

This is the 3rd time that Nifty will be attempting to break this and we need to see whether it will happen or not. On the lower end, 10550 will be the support but Nifty has been finding support at 10700 indicating that it prefers to stay in the top end of the 10550-10880 range. What we need to observe carefully is whether Nifty closes above 200dma or below. That will decide the future of Nifty.

Derivatives Action

On the derivatives front, there was bearishness seen in both Futures and options market, as Futures have seen selling to the tune of 1600 Cr and the overall long positions in Nifty futures came down to 57% from 62%. On the options front also, there were more calls shorted and more puts bought and that brought the Nifty put call ratio down to 1.47 from 1.67 mark where it started this week’s expiry.

Individually 10800,10900 and 11000 all added 12.2 lakh positions while 11300 call added 10.6 lakh positions and 11000 call still has the highest OI followed by 10800 call. On the put side 10000 put added 10.8 lakh positions while 10600 put added 8.8 lakh positions and 10700 put added 7.1 lakh positions and 10000 put has the highest OI followed by 10700 put indicating that 10700-11000 could be the range for this week’s expiry.

What is the Nifty call for the day?

A bright Asia and a positive SGX means we are likely to open gap up between 10800-10830 range and we need to see if there is selling happening here or not. That would be clear in the first hour. After the first hour if Nifty retains itself in 10780-10800 zone then you can go for a long position with 10860-10890 as the range.

Try exiting your positions below 10900 mark don’t try to stretch your luck too far. If in the first hour Nifty drops below 10750 then it is better to stay out of the trading today and see what happens subsequently.