Today is the first monthly expiry of the decade and we are exactly where we were at the beginning of the series. January started at 12127 and we closed yesterday at 12129.
So, today’s movement will decide whether the first series of the decade will be a bull series or the bear series. Yesterday we conquered the 50dma and the target for today will be to conquer 20dma. But, will market oblige and give us that move and break a big resistance at 12180 levels and take Nifty beyond is a big question.
It is because Worldwide markets are down again on the Corona news. Fresh cases are being reported and the death toll is rising. Even countries like Singapore which are as big as Hyderabad city also has 10 confirmed cases of Corona. That has pulled entire Asia down, but the US was flat yesterday on the news of Fed rates being kept unchanged at 1.50-1.75 band. But Asia is red with Japan and Hong Kong down nearly 400 points each.
On the domestic front, its the budget and the Q3 results that were in focus yesterday. There were a bunch of consumption companies that came up with their Q3 numbers and they overall didn’t disappoint. Jubilant food works and Pidilite both reported good numbers and that is really good news. But on NBFC front, while Bajaj Finance reported good numbers, Bajaj Finserv disappointed a lot.
Today also is an important day with 3 FMCG majors Colgate, Dabur and Marico reporting their Q3. Dabur will be watched very closely to look at the rural demand. Technically we are exactly at 50dma of 12127 and now we have the 20dma placed at 12204. So, today could be the day of battle between bulls and bears with bulls trying to conquer 20dma and bears wanting to take Nifty below 50dma first and then to 12000 mark.
On the derivatives front, today is the monthly expiry and we had seen some buying happening in the Nifty futures yesterday but most of it was for February series. We saw 400 Cr plus buying in Nifty futures and the overall long positions in this series stay at 40%. The rollovers for the February series stand at 45% as of yesterday.
On the options front, the Nifty PCR showed a slight improvement to 1.11 from 0.99 mark due to aggressive short positions taken at different puts. 12100 put added 7.7 lakh positions while 12150 put added 7.6 lakh positions and 12000 put still has the highest OI on the put side. On the call side, 12100 call shed 17.6 lakh positions yesterday as Nifty broke that 12100 mark and 12150 call added 5.7 lakh positions. 12200 call still has the highest open interest on call side indicating 12000-12200 expiry range.
What is the Nifty call for the day?
Yesterday we saw markets going up and crossed the 12100 mark and today also the trade looks similar but you will not get the gap up you got yesterday. We might open around 12100-12130 band and protecting the 50dma is a challenge early morning.
As today is a monthly expiry, there could be some volatility. So, the strategy could be to use the morning dip and enter the market with 12150-12170 as the target. You might get it today or you might have to wait till tomorrow, but with budget coming in you will surely meet the target.