16th July'2021 (Evening)

16th July'2021 (Evening)  --  | Written on 18th July'2021 at 08.15PM |

  • The indices opened extremely strong on Friday. Nifty was above 16000 in the preopening on Friday. Nifty opened at 15958 (a new All time high) and Bank Nifty opened at 35977. Both the indices broke their resistance zones and gave a much awaited breakout. 
  • However, post the opening both the indices were sold and started declining. While Nifty saw a long unwinding on the futures side, Bank Nifty actually saw a short buildup at these levels.
  • So the opening levels were the day high for both the indices. Nifty saw an intraday sell off of some 80 points, Bank Nifty saw a sell off close to 300 points. Important is that Nifty covered a good 40 points out of this. Bank Nifty could recover some 80 points.
  • While Nifty closed above its long time resistance zone (Nifty actually made a new closing high of 15923), Bank Nifty closed below its resistance at 35800. Now, a follow through is important to be watched.
  • FII again sold for 466Cr and DII bought for 666Cr. FII have been net sellers almost everyday (with some small exceptions) since the June closing and their selling is being bought by the DII.
  • FII also created new shorts and unwound some longs on indices. These shorts may have been created on Bank Nifty, which seems to be a bit weaker than Nifty.
  • On the global front, European markets closed generally down and US indices were down as well. So tomorrow, our markets would open to a weak handover from US. Asian markets were also mixed on Friday, we may open to a weak Asian opening tomorrow. With this, I expect a gap down opening tomorrow.
  • Now the important part is do we see a continued selling and profit booking, following the weak global cues or we see support coming in at lower levels and some consolidation again.
  • I would watch these levels as important levels :
    • Nifty first level - Friday low of 15882 (This may go off in the gap down opening)
    • Nifty Second level - 15764 (may act as first level of support)
    • Nifty Third level - 15645 (may act as second level of support)
    • BankNifty - Friday low of 35676 (This mat go off in the gap down opening)
    • BankNifty Second level - 35436 (may act as first level of support)
    • BankNifty Third level - 35065 (may act as second level of support)
  • While I do not expect levels below what I mentioned above, if these are breached then the earlier levels I have mentioned hold good. (Please refer my earlier notes, in case you wanna look there).
  • The options OI indicate support at 15900 for Nifty and 35500 for BankNifty, and a resistance at 16000 for Nifty and 36000 for BankNifty. So do watch for OI build up tomorrow, at these levels.
  • US Consumer sentiment index on Friday dented the sentiment somewhat and the global concerns on the Delta variant was influential in the markets on Friday.
  • In the upcoming week, watch these important events. Bank of Australia meeting minutes and US building permits data on Monday. US jobless claims and home sales data from US on Wednesday. ECB press conference on Wednesday. German and British PMI on Friday.
  • Our markets would be closed on Tuesday on account of Eid. So next week will be a shorter week.
  • The Dollar index has risen to 92.7, however, it is still below the important 93 mark. So keep a watch on this as well. US 10Y yields are good at 1.3%.

1. FII were net sellers for 466 Cr today, while DII were buyers for 666 Cr. A net buying of 200 Cr from the institutional side.

2. FII's Unwound 5996 longs and created 6897 shorts on the indices

3. On the option front FII  sold 70176 calls and   sold 40611 puts. They also bought 54923 calls and  bought 62139 Puts.

4. For next week expiry, Nifty has the highest OI for PE at 15900 followed by 15800 and highest OI for CE is at 16000 followed by 16200. Highest Put writing was seen at 15900 and highest call writing was seen at 16000 levels.

5. For the next week expiry, Bank Nifty has the highest OI for PE at 35500 followed by 35000 and highest OI for CE is at 36000 followed by 38000. Highest Put writing was seen at 35500 and highest call writing was seen at 36000 levels. 

6. Asian markets closed mixed and Europe closed flat to red

7. US markets closed in red on Friday

8. The breadth of the market was neutral

9. Nifty opened at 15958 and made an intra day high of 15962 and a low of 15882 before closing at 15923 .The range of Nifty for the day was 80 points.

10. Bank Nifty opened at 35977 and made an intra day high of 35977 and a low of 35674 before closing at 35751 .The range of Nifty for the day was 303 points.

11. US Dollar Index is trading at 92.720

12. Realty, Metals and pharma led the rally today. While banking and IT were sluggish

13. India VIX reduced to 11.71

14. US 10Y yields are at 1.300

15. Nifty futures saw long unwinding

16. Bank Nifty saw short buildup


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