The expiry day for the third series of the year is finally here. Unlike the last two series which saw close calls for bulls and bears, this series has been completely in the grip of bulls having gained 653 points so far which is the highest in the last 8 months. Today’s expiry has a lot of global and local cues to worry about and the primary of them is the yield inversion where the 10 year US bond fell to 2.35% which is the lowest since 2017 and now the talk of slow down and recession is growing louder. The result was the US closed in mild red losing more than 30 points and Asian markets are also in red with Japan losing more than 300 points and other markets also in mild red.
On the domestic front, yesterday was an action-packed day with PM Modi putting up a tweet that he is going to make an important announcement at 12 noon and the whole nation waited with bated breath. Finally, the announcement was about India being the 4th country in the World to test the Anti Satellite missile at lower orbits of as low as 300kms. This could protect us from any spying that enemy nations can do on our data and communications and also we can shoot any satellite spying on us. This is indeed a great achievement but what it ended up opposition complaining to EC about the violation of poll conduct. EC has taken it up for probing. So, politics dominating the space today than economics.
Coming to derivatives, today is the expiry day and we had January series going to bulls with 60 points and February going to bears with 40 points and till last day we were not able to predict the winner. But this series is firmly in bulls grip with 653 points and yesterday we have seen a record turnover for the penultimate day of expiry. The turnover was at 17.2 lakh crore and now we have to see whether we will hit the 20 lakh crore turnover or not. The Nifty put-call ratio fell to 1.49 from 1.64 as there was a lot of put unwinding. 11200 puts saw 6.1 lakh unwinding, while 11300 put saw 4.7 lakh, 11000 put 4.1 lakh and 11400 put 3.5 lakh. The highest unwinding on put side happened at 11500 put which saw 7.4 lakh positions disappearing.
All this have left the put side or support side very confused and 11000 put has maximum open interest followed by 11400 put. So, we can conclude that 11400 is a support that will hold for today. On the call side, 11600 call added 11.2 lakh positions followed by 11450 call that added 6.5 lakh positions and 11550 call added 5.4 lakh positions. 11600 call has the highest open interest followed by 11500. So, 11600 should be achievable if Nifty doesn’t correct today. If we take a hint from 4th April weekly expiry 11500 call has the highest open interest and very close to it is 11600 call. So, options present a very confused picture now.
What is the Nifty call for the day?
We will have a flat opening around 11450-11470 zone and then the first resistance will come at 11520 levels and if Nifty is able to take it effortlessly then we can go all the way upto 11580-11600 mark intraday. On the downside 11410 is strong support. So, my feeling is today if the open remains positive and Nifty doesn’t fall much then we can go for a long position in April series. Am saying April only for safety reasons. But one thing we need to remember is, last two months expiry did present some volatility and today also you might see it and don’t be surprised if Nifty goes to 11580 if it manages to cross 11520 in the first one hour. The target for your long position taken below 11500 mark should be 11550-11580 mark, any time in the next 3-4 session starting from today.