The last series of the year 2019 starts with bulls already walking away with a 7-4 lead. When we began 2019 it was on a very nervous note on what would happen in elections and the uncertainties surrounding the economy and dropping food inflation and farm distress.
Now as we enter the last series of the year, we have answers for many of the uncertainties mentioned above but there are some new challenges emerging but market negotiated them well with Nifty touch an all-time high. We are at 12150 now and where are we going to head from here needs to be seen.
Globally things are not great with Dow closing flat and Asian markets in red due to unrest in Hong Kong. It is down nearly 500 points and that has pulled all other Asian markets by 0.5% to 1.5% down. Brent crude also moved below 64 tradings at 63.8 dollars.
Domestically, there is a lot of news around to digest, with the debate on GDP base year to swearing-in of new CM in the financial capital of India. The most important news, however, is the GDP data for Q2 which will be released today. Govt has projected a modest 4%, while Nomura projects 4.2% while the analysts are expecting 4.6%. As said yesterday, my take would be between 4.5% to 4.7% which is anyway is lesser than 5% seen in Q1.
Technically, today is the start of the new series and the first day will always be a positive day and on the upside sky is the limit but on the downside 11940 which is the 20dma will be strong support which might not break. Nifty when it opens on Monday has to digest the GDP figures as well as auto sales data for November. So, today and Monday might be two different days, so carrying positions might be risky.
What to expect from the December series?
December has been a positive month if we take the last 3 years, except last year, the previous two years were green, so we can expect this series also to be positive. The Nifty rollovers have been at 79% vs the 3 month average of 75% which is also positive. The overall long positions in Nifty futures also starts at 61% which is the highest after the 62% seen in the month of July.
The expiry yesterday was from a relatively low market cap of 24.6 lakh crore and if we look at the options PCR for 5th Dec expiry, its at 1.77 vs 1.63 at the beginning of the day. For 5th Dec expiry, 12200 call added 4.8 lakh positions while 12300 call added 4 lakh positions and 12200 and 12100 call both have highest OI on call side. On the put side 12000 put added 11.9 lakh positions and 12100 put 8.3 lakh positions and 12000 put has highest OI, making it a 12000-12200 range for this week.
What is the Nifty call for the day?
Yesterday was a very flat expiry day with Nifty moving in the range of just 40 points even on expiry day, but the good news is we closed at the upper end of the range at 12150. Today we are likely to open around 12130-12150 mark and we might find support at 12100 levels and that I feel is a good point to go long.
The first day of the series is usually green and we might see Nifty testing 12200 on the upper side. So, today we might have a 100 point range and you can enter at 12120-12140 mark with 12180-12200 as an intraday target. Close your positions at whatever profit you get as taking them to Monday could prove risky.