Donald Trump’s statement last night was a huge sigh of relief for markets across the globe. The tensions seem to have come down for now. Trump talked of peace with Iran but has announced some economic sanctions which sound more like a face-saving exercise than anything else. The US acted, Iran reacted and Trump said peace!
That’s it immediately crude prices came crashing down and from 71.2 dollars crude is now at 65.7 dollars and that means the crisis is more or less over. Dow Jones was going up as Trump was speaking at one stage it was 300 points up but settled down 160 points higher. Asian markets today are in bright green with Japan up more than 450 points and Hong Kong up more than 300 points. SGX Nifty after a very long time is looking bright with 120 points gain.
On the domestic front, things will now start moving towards India specific factors like Q3 earnings from the tensions in Iran. We were more worried about crude prices and with Brent cooling off that tension is also gone. The results season officially kicks off tomorrow with Infosys declaring its Q3 numbers and then we will have the CPI and WPI inflation numbers for December coming in on 13th and 14th and the IIP on 13th.
Nifty will now start planning for a pre-budget rally that was pending from some time now. Technically, Nifty took support at 50dma of 12000 and now the barrier to cross is 20dma of 12150 and once Nifty takes that out then we will be looking at an all-time high if 12294, which can happen this week itself if Nifty crosses 12150 today. Then we can have a dash at 13000 mark for the budget day.
On the derivatives front, today is the Nifty options expiry and the cues were very bullish yesterday for options. Though there was selling seen in Nifty futures and the overall long positions fell to 49% there was a huge buy figure seen in options. The sign of bullishness is evident with buying happening in calls and selling in puts which kept the Nifty put call ratio at 1.25 vs 1.19 seen yesterday.
Yesterday, 11900 put added 5.4 lakh positions while 11950 put added 4.2 lakh positions and 12000 put saw some unwinding of positions but still 12000 put has the highest OI on the put side. On the call side, 12000 call added 3.5 lakh positions while 11950 call added 3.4 lakh positions and 12200 call has the highest OI on call side making it a 12000-12200 range for the expiry that is happening today.
What is the Nifty call for the day?
Finally, Trump has put an end to uncertainty on Iran and today we will open almost 100 points up from yesterday’s close, but if you see we were at 12250 before this crisis began. The crisis took us to 11900 and from there we would be reaching 12100 mark now and we still have some ground to cover. Good news is crisis ended and the open could be around 12100-12120 mark and we will have the 20dma at 12150 mark where there might be some resistance.
If Nifty manages to cross that then 12180-12200 is the expiry related resistance which is a bit tough to overcome. So, you will have a limited chance of trade today and you can take a long position at 12100 and above and look at a 40-50 point target to close it. A close above 12150 mark means we are approaching an all-time high in the next 2 sessions.