Markets have probably decided to test the 5650 mark for Thursday’s expiry and may well show a similar small positive move tomorrow and end up with a big play on expiry Thursday as rollovers would mean shorts have it bad with only index shorts by FIIs evidence of the downward move in the last week. Though by itself that does not mean that the put call ratio of 0.75 or the current 0.85 at open will result in a bullish candle to 5700, traders betting short if any left do not really have returns on the short end of the trade.
The Sensex is holding 18500 levels and even if the nifty drifts lower instead and there is an outward risk of a big short, no new shorts have been added in the last 7 days on the BSE or the NSE according to the network reviews Discounts on the June series are obvious and should not have been treated as informative for trend with June longs hoding a healthy enough 10 point premium for a market move in any direction and is unlikely to accumulate speculative long only interest in this market . The pull up might again weakly ensue in OTMs as without active shorts markets amy still make a feeble attempt at closing June closer to the starting point if not in positive territory which can easily be ruled out.
Bank Nifty is holding 11200 and July may well not shout for lower levels though there is still a definite probability of a deeper negative move purely n the extent of unidirectional momentum created by the Fed pronouncements for fund managers using it a s an opportunity to pare holdings in US bonds and thence global assets including EM debt and equity as that would avoid them frequent shocks when outflows continue as a result of the Fed prognostication of a complete recovery is roved wrong for the US and its trading partners.
Pair trades with ICICI Bank on the buy side are doing well as also those who have chosen the bankNifty for the buy and shorted a PSU bank with negative prospects. Today’s move is well treated as a dead cat bounce till expiry is closed out.
- India Morning Report: 5750 is here and it’s Friday (awardz.wordpress.com)
- India Morning Report: As we said it, so did the market bid it (awardz.wordpress.com)
- India Morning Report: Sharp cuts ensure quick bottom in India around 5650 (awardz.wordpress.com)
- Sensex Falls Over 200 points, Nifty below 5600 (interadaystockcalls.wordpress.com)
- India Morning Report: India needn’t have worried about Fed pronouncements (awardz.wordpress.com)
- Indian Nifty Futures Drop Before Derivatives Expiry, Growth Data (bloomberg.com)