Expiry week is here and we are at the record closing for the Nifty at 11844 mark and the election results going in the way of BJP has markets stabilizing at 11650-11700 zone and we are back on the upward direction again. Globally things are looking very confused. US markets ended green on Friday with a growth of nearly 100 points.
But Asian markets today have opened in the mixed zone with Hong Kong, China and Singapore in mild red while other markets are in mild green zone. Japan is in the green zone as it is expecting some positive news in the wake of Trump’s state visit to Japan. The good news however is the Brent crude which is still trading at 68.8 dollars mark.
On the domestic front, this is a week that has got some important cues to watch out for. 30th May which is the day of expiry will see the new Govt of Modi taking oath at 7PM on that day and the focus will be on the ministries and the most crucial is the Finance ministry.
Arjun Jaitley’s health condition is a cause of concern but there are reports which say that he is recovering fast. The other news is the annual GDP numbers for FY’19 will be released on Friday 31st. On the Q4 front, Bata came up with below expected numbers confirming the slow down in consumption and so does Ashok Leyland which grew just 1% in revenues and Auto sector is in a serious slow down and will take few quarters to recover.
On the derivatives front, we had a good buying on Friday as Nifty went up in the afternoon session. The good news is volatility have come down post the elections and that brought down the premiums of many options contracts.
Talking about the options, Friday saw the Nifty put call ratio jump from 1.05 to 1.23 and that was on the demand that generated for puts, especially short puts. 11700 put added 10.7 lakh positions and though it is behind 11000 and 11500 in overall open interest it might come out as the base for this month’s expiry. On the call side 12500 still has the highest open interest followed by 12000 call so there is a chance that we might cross 12000 before this Thursday and might test 12200 also.
What is the Nifty call for the day?
Friday we avoided trading and on that day we had a 180 point growth on Nifty and though you might have felt that a chance to make money was missed but Friday was used as a confirmation to establish the trend of the market. Now we know that 11700 is a support and Nifty can cross 12000 and may go all the way to 12200 mark this week.
Today we will have a flat opening in the range 11830-11860and on the down side 11750-11780 will be the first level of support. The upside goes all the way to 12040-12060 zones and that might be achieved anytime this week. I would suggest you to go for a long position at the dip around 11800-11850 zone with 12000 as the target to be achieved anytime this week. Secondly, I would advise you to take these positions in the June series if you feel that its too risky to take such a trade with May series.