As we approach the weekend, the pressure of selling seems to have ebbed. Yesterday’s market move by the end of the day gave a ray of hope to the bulls where the market recovered all the way from 7800 levels, went to as high as 8560 and then lost some steam in the last hour to close at 8250 levels. The fact that 8200 and 8000 levels are protected is an important signal. Globally too, things are looking up.
After going below 20000 mark, Dow Jones has recovered a bit yesterday and closed above the crucial 20000 mark. The US is reeling under Corona scare with 5000 fresh cases reported yesterday but the market seems to have put it back of further stimulus coming in from the Fed. Brent Crude also jumped 14% yesterday to reach 28 dollars and today Asia is in green and so is SGX and so we have a ray of hope for us.
Domestically, the big worry is Corona. India in the last couple of days moved from 10-15 cases per day to 25-30 cases per day and there is a worry if this will escalate and go into the stage of community transfer. Questions are raised on the amount of testing done and the preparedness if we go into Stage III. There was an address by PM to the nation where he appealed people to stay indoors as much as they can, proactive social distancing, called for a Janata Curfew and also announced an economic task force under the Chairmanship of Finance Minister.
Corona cases today will be watched very carefully and Nifty movement depends a lot on it. 8560 which is yesterday’s high could be resistance for Nifty today and 8100 could be the support. If the Nifty range comes down that will also bring down the volatility which is now above 70.
On the derivatives front, Yesterday there was almost an equal action seen on the Futures where there was buying matching the selling and the overall long positions remained constant at 35%. On the options front, however, there was more action on puts with puts getting bought as well as sold. This has pushed the Nifty put-call ratio to 1.15 vs 0.96 level seen yesterday.
Though it was a weekly expiry the turnover was just 18 lakh crore, half of what we see usually. For the March monthly expiry on 26th 8500 call added 4.6 lakh positions while 8200 call and 8400 call added 1.9 and 1.6 lakh positions. 8500 call has the highest OI on the call side. On the put side 7500 put added 8 lakh positions while 7000 put added 6.5 lakh positions and 8100 put followed by 7500 put have the highest OI making 7500-8500 as the range for expiry for 26th March.
What is the Nifty call for the day?
Its a weekend and there is no need to take a chance. There is green across Asia and SGX is also likely to open in green but will Nifty cross 8560 or not needs to be seen. There is also talk of fiscal stimulus and if it comes through we can even see a 10000 on Nifty. But uncertainty is not the entity to trade.
So, I suggest to have a calm weekend and hope that we open on a bigger and better Monday with Corona scare vanishes from India. Till then stay out.