Festival season to many parts of India but it’s the working days for the market. Surprising that when most of South India is in a major holiday and when Punjab is celebrating Lohri, we don’t have a holiday for even a single day for the Indian stock markets. That apart, things are looking bright during the festive season, as we are looking like emerging from the scare we saw on Friday.
After crossing 12300 and making an all-time high, Nifty sold off 100 points and went all the way to 12200 to however recover and close around 12250 mark. The rumours on Iran tensions pulled the market down and with nothing happening over the weekend, today Asian markets have opened in green and Hong Kong is 150 points up, while Japan is shut for a holiday. Brent also cooled off a bit and trading at 64.7 dollars, all positive triggers for us.
On the domestic front, the good news continues with IIP numbers on Friday coming much better than expected. Coming from a -4.7% in October, November IIP improved to 1.8% and this was beyond everyone’s expectations. Manufacturing saw a fantastic growth of 2.7% with intermediate goods showing 17% growth. This will surely have a positive impact on Q3 GDP. Today the CPI inflation for December is expected and it is likely to come at 6.5% compared to 5.5% in November.
The core inflation is likely to remain flat around 3.7% vs 3.5% in November and this 6.5% will be mainly due to vegetable and food prices. Technically, we have the 20dma placed at 12180 mark and that will be a support for any fall. Next support is 12050 which is 50dma and the resistance is 12310 mark which is the new all-time high made on Friday.
On the derivatives front, Friday saw a lot of positive action in the Futures market, while there was some bearishness in the Options market. There were 3 long positions taken for every short position in Nifty futures and that got the overall long positions in Nifty futures to 54%. However, in the options market, 3 puts were bought for every 2 calls, indicating some bearishness and puts and calls were sold in equal numbers. This has brought the Nifty PCR slightly down to 1.55 from 1.59 mark.
For the 16th expiry, 12250 put added 4.7 lakh positions, while 12200 and 12300 put added 4.6 and 4.5 lakh positions each. Now 12200 put has the highest OI on the put side. On the call side, 12300 call added 5.8 lakh positions, while 12350 and 12400 call added 4.8 lakh positions each and 12300 call has the highest OI on the call side.
What is the Nifty call for the day?
Friday saw some selling during the midday on the rumours of some tensions in Iran, but that was bought in and Nifty recovered 50 points from the lower levels to close at 12250. Today, we are likely to have a positive opening around 12270-12290 mark and 12310 which the all-time high will be the resistance and on the downside 12250 and 12200 are the supports.
For today, you can go long at any correction towards 12250 mark with 12300-12310 as the target. Even if you don’t get that dip, still you can go long for a 40-50 point target and there is a likelihood that you might achieve the target today itself. Happy Lohri!!!