18th Jun'2021 (Evening)

18th Jun'2021 (Evening)

  • I mentioned in my Thursday blog that the the market activity on Thursday was influenced by the expiry and the real direction would evolve on Friday. Also that the High and low of Thursday are the first indicators of direction.
  • Though the markets on Friday opened gap up, they continued to slide through the day. Though they breached the Thursday lows and took a sharp dip from there. Nifty made a low of 15450 and BankNifty made a low of 33908, both below the crackdown levels I indicated on Thursday. 
  • However, there was a sharp recovery seen from those levels and both indices almost recovered all losses as compared to Thursday closing. Nifty recovered 200 points and BankNifty 650 points.
  • In the cash market, FII on Friday bought and DII also bought. The total buying from the institutional side was more than 3000Cr. I believe most of this came in the evening and was responsible for the late recovery on Thursday. 
  • So these two levels now become actually very important supports for both indices, 15450 on Nifty and 34900 on BankNifty.
  • On the FnO side, FII created almost same amount of longs and shorts. They sold more puts and hedged them by buying puts. This probably is driven from the recovery seen.
  • The Dollar index and US Yields have become relevant again. With Dollar index rising above 92, this could hurt us well. However, the Yields are still manageable. Fuel prices are above 73Dollar and not good for us.
  • Nifty saw short covering and BankNifty is seeing a gradual short buildup. Nothing great happening for the bulls.
  • On Friday evening US markets tumbled after statements made by FED president James Bullard. These statements kind of fortified sentiment created by the indication of earlier than expected rate increases. 
  • Europe closed down and some futures dipped further.
  • Asian markets would react to this tomorrow morning. I expect a gap down opening tomorrow. 
  • Now, because of this gap down if the indices open below the critical levels mentioned above, a further cut is very much possible. Also, if they open above these levels, we need to watch a breach of Thursday lows.
  • Another important parameter to watch tomorrow would be the US futures and related cues from the Asian markets.
  • So tomorrow our markets would react to the global cues. In general, I would be bearish.
  • This being the last week of the June expiry, expect volatility. Market positioning on the options front indicate a wider range. However, i would watch the levels as above and wait for the buildup on options to mature tomorrow.

1. FII were net buyers for 2680 Cr today, while DII were buyers for 446 Cr. A net buying of 3126 Cr from the institutional side.

2. FII's created 5598 longs and created 7470 shorts on the indices

3. On the option front FII  sold 23335 calls and   sold 40278 puts. They also bought 16005 calls and  bought 43446 Puts.

4. For next week expiry, Nifty has the highest OI for PE at 15000 followed by 15500 and highest OI for CE is at 16000 followed by 15800. Highest Put writing was seen at 15000 and highest call writing was seen at 16000 levels.

5. For the next week expiry, Bank Nifty has the highest OI for PE at 34000 followed by 33000 and highest OI for CE is at 35000 followed by 36000. Highest Put writing was seen at 33500 and highest call writing was seen at 34500 levels. 

6. Asian markets closed mixed and Europe closed in red on Friday

7. US markets closed in red on Friday

8. The breadth of the market was extremely weak on Friday

9. Nifty opened at 15756 and made an intra day high of 15761 and a low of 15450 before closing at 15683 .The range of Nifty for the day was 311 points.

10. Bank Nifty opened at 34735 and made an intra day high of 34787 and a low of 33908 before closing at 34558 .The range of Nifty for the day was 879 points.

11. US Dollar Index is trading at 92.325

12. Except FMCG all sectors closed in red.

13. India VIX reduced to 14.8

14. US 10Y yields are at 1.443

15. Nifty futures saw short covering

16. Bank Nifty saw short buildup


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