Finally, we saw the rally and all-time highs being made. It was on 3rd June, the day after Mr Modi took over as the PM we had made an all-time high of 12013 and then today when Fadnavis was resigning as Maharashtra CM, we made another all-time high of 12132. From an all-time high of 12103 in June, Nifty lost nearly 1500 points and went to 10630 on 19th September. Now we need to see if we are in for another correction after hitting an all-time high or are we going to continue the rally and go towards 12500 mark needs to be seen.
Globally things are looking bright with US markets hitting another all-time high as it closed 55 points high. Asian markets are looks slightly in the greenish zone with Japan up close to 100 points and Hong Kong up by nearly 50 points. Brent crude touched 64 dollar mark now trading at 64.2.
On the domestic front, yesterday was a high action day with Nifty hitting all-time high as soon as it opened and then went to 12130 mark in next 15 minutes. But after that, the focus shifted to Supreme Court and when the verdict came that the floor test has to happen by 5 PM today, things went from bad to worse for BJP. Market sensed that and from then on, the downward spiral began as Nifty came down below 12100 mark and when Ajit Pawar resigned it went to as low as 12010 mark before recovering and closing near 12040 mark.
Today might be a different day as the focus will now shift to other things and we need to see if we will recover to touch the 12100 mark again or will we slip below 12000 mark and go down. On the downside, 20dma is now placed at 11903 and that would be very strong support making it a 11900-12150 range for now.
On the derivatives front, something very bullish is happening in the market which we were not able to see due to Maharashtra. There was a huge surge in premium in Nifty futures and from 22 points the premium went to as high as 60 points and closed at 42 point premium. The overall long positions in Nifty futures jumped to 50% the highest we saw in November series. This simply means the market is very bullish.
Options chart shows demand returning to calls and Nifty fell during the day and the put-call ratio settled to 1.52 from 1.70 mark. For tomorrow’s monthly expiry 12100 put added 2.7 lakh positions while 12050 put added 2.2 lakh positions and 12000 put has the maximum open interest. On the call side, 12200 call added 5 lakh positions and 12100 call added 4.2 lakh positions and now we have 12100 call with highest OI making 12000-12100 the range for the expiry.
What is the Nifty call for the day?
Yesterday, Nifty lost more than 120 points after hitting an all-time high and this all-time high was just a 15-minute experience in the morning. We had however closed above 12030 resistance mark indicating that the range moved to 12000-12150 but it needs confirmation.
We are likely to open flat today around 12030-12050 mark and we will have 12030 as the first support which if broken, we might go to 11980 mark. On the upside 12100 will be a resistance to deal with. So, the trade for the day is to go long if 12030 mark holds with 12100 as the target. Apart from this, I don’t see any other trade.