Finally, the rally that we were all expecting came and came with a bang. This is the biggest rally we saw in almost 4 months and Nifty gained almost 200 points on a single trading day and from 12000 levels we are back to above 12200 mark, the level we were before the fall started. Crude oil continued its journey downward and has cooled off to 65 dollars and that means we won’t have any more petrol and diesel price hikes before the budget.
Not only our market, markets across were trading positive yesterday and Dow Jones closed 210 points higher. Today morning however the cues are slightly different, with Asian markets trading in absolutely flat zone. In fact Hong Kong and Japan corrected yesterday itself, for now Japan is up 30 points while Hong Kong is down 20 points.

On the domestic front, today we have two important cues to watch out for, one is the core sector data for the month of December and another is the IIP data for November. The core sector numbers that came at -1.6% for November is likely to be better now and in a positive zone. The IIP is also likely to come close to 0% mark for November compared to -2.4% seen in October. Added to this Infosys is also coming up with its Q3 numbers but all of this will happen after market hours.

So, today will be more of a technical day with the 20dma of 12150 being the test to see whether Nifty can hold this level or not. On the upside 12294 is the all-time high and today we have Nifty moving within this range. If Nifty holds 20dma then it will move to challenge the all-time high and might go up above 12300 mark next week.

On the derivatives front, yesterday was the options expiry for Nifty and Bank Nifty and we had a whopping 32.89 lakh crore turnover, shattering all the previous records. The positive sentiment arising out of decreased tensions in Iran have made traders to trade in large volumes and that is the reason for this. I can say this because out of 32.89 lakh crore 31.66 lakh crore came from only Nifty and Bank Nifty.

Just for info, 12200 put had 34.5 lakh positions created, 12150 put and 12100 put generated 34.2 and 28.2 lakh contracts. After a fantastic close for the 9th January series now all eyes are set on 16th January expiry. For this, 12100 put added 13.7 lakh and 12200 put added 12 lakh positions and 12100 pit has highest OI on put side while on the call side 12200 call has a highest open interest.

What is the Nifty call for the day?

As the tensions in Iran have subsided, we are back to the 12200 mark now, and now the journey will be to move past 12250 mark which is a resistance mark that Nifty will encounter today. The open might be around 12200-12220 levels and on the downside 12180 and 12150 which is the 20dma will act as supports.
On the upside 12230-12250 is resistance and only if Nifty takes that out it can go towards 12300 mark. So, the trade for the day is to take a long position on the morning dip around 12180-12200 mark with 12230-12250 as the target. If these levels are not met, you can still carry your positions to next week as I see no immediate danger that can drag markets down from here.