Another all-time high made, another all-time high close achieved. Nifty has now gone to 12337 and the magic number of 12345 might be achieved today, right at the open. It’s really auspicious that we will finally have this fancy number of 12345 on Sankranthi day. Not only our market the even US is moving higher and higher and making all-time highs.

Dow and NASDAQ both made record highs and Dow closed 90 points higher. This is primarily on the news that the US has removed China from the list of a currency manipulator. Trade wars are ending now and Yuan also strengthened to 6.87 from 7 we saw few weeks ago. Asian markets today morning are also in green with Hong Kong up 70 points and Japan 100 points. Brent crude has fallen further and has reached 64 dollars which are good news for India.

While things are looking good globally, domestically we have a very big worry to deal with and that is inflation. Till some months back we had low inflation and deflation in food items, but now food inflation soared to a 7 year high of 14% and the general inflation for December came at a 5 year high of 7.35%. Vegetable inflation is at a whopping 60% while services inflation is still at 3.7% up from 3.5% seen in November.

This presents a strange situation to RBI as to what to do in its monetary policy in February. How much effect this news of inflation will have on Nifty needs to be seen now. Nifty is at an all-time high and 12350 can be seen as resistance now and on the downside 12200 which is the 20dma will offer support. On Q3 front IndusInd bank will come up with their numbers today.

On the derivatives front, yesterday was a reasonably good day for Nifty futures where close to 200 Cr buying was seen and that took the longs in Nifty futures to 55% from 54%. In the options market, however, the caution continues as traders continue to buy a lot of puts as a protection for any fall that might come. However, they are also shorting more puts than calls and that is a positive sign. That brought the Nifty PCR to 1.63 from 1.55 levels.

12300 put added 11.7 lakh positions and 12250 and 12200 puts added 6.8 lakh and 4.8 lakh positions respectively. 12200 put now has the highest open interest on the put side. On the call side, 12600 call added 4.2 lakh positions while 12400 and 12500 call added 2.9 and 2.3 lakh positions and 12500 call now has highest OI making it a 12200-12500 as expiry band for 16th expiry.

What is the Nifty call for the day?

Yesterday we closed above 12300 mark for the first time and though there are a lot of global factors that can take Nifty up, there are some domestic worries like December inflation which could pull the markets down. So, we will open at another all-time high around 12320-12340 mark and how far will it go from here needs to be seen.

12350 is resistance and if selling happens there we will be back to 12300 or even below that. So, the trade for the day is close all existing long positions that you have around 12350 mark and then try taking a short position there with 12300 as the target. We can expect some correction before Nifty goes and conquers the 12400 mark now.