Market set to start soft following fresh tweets from Trump that may signal the continuation of the conflict in West Asia. Yesterday’s recovery was on the reckoning that the war may eke out. There was some brisk short covering by traders in the Nifty that helped the index to close the gap left on Friday. Bank Nifty did likewise but reached near the gap. In the Update post of yesterday I had mentioned that 25k and 56200 should be crossed for bulls to breathe easier. Well, the indices have crawled up near there yesterday. If market cannot sustain the momentum into today, the resistances may hold.
Yesterday, Brent prices dipped towards $70 and it seemed things were smoothening out. But with the tweets from Trump, it is back at $74 levels. Oil prices are the ones to track to get a clue on how this geopolitical crisis is being perceived by the rest of the world.

Option set up reveal that Nifty continues to see call shorting while the BNF betrays a bullish bias as the positions are more or less maintained. Since the BNF lagged the NF yesterday, any stalling of the trend will lead to faster erosion of the premium of Calls. Those that play options should take note of this. Coming up soon is Sensex expiry and the premium there are normal-ish and therefore market is not anticipating big moves. So, perhaps the big gap of Friday and Monday recovery have more or less taken away the big move days?

If long in NF, raise your trailing stop to a close below 24880 and to 55800 in the BNF. The resistance levels to cross continue to remain the same as mentioned yesterday. It is worth mentioning here that weekly and monthly charts have not deteriorated with last week’s drop and if, somehow, the market shrugs off the current noise, then it would have the tailwind of the bigger time frames and that can be a good positive. So, a lot of ‘ifs’ but currently we have to keep all these in mind.

Sentiment back to leaning towards positive. Important sectors that influence it like Pharma IT and Defence should be watched for some strength for the sentiment to improve further. Small and Midcap indices are ticking along, so no sense of panic in the retail segment. That is a positive too. After quite some days, FII covered some shorts in Index futures. Now, that is a trend I want to see it continue to build more confidence. PCR is 1.14, inching up but this number is non-comment on trend expectations.

Vishal Megamart to have a block deal today. It is interesting that the size has been increased from 10% to 22%- for, this implies demand for the stock. Look for buying at lower levels.
Zee group is putting in money through some debenture allotments. Is there any whiff of revival here? Some base formation with an attempt to stage a breakout from there is visible on the charts.