20th Jul'2021 (Evening)

20th Jul'2021 (Evening)  -- | Written on 21st Jul'2021 at 10.15PM |

  • Markets again opened to very weak global cues on Tuesday. Indices after opening gap down, were  continuously sold off and Both Nifty and Bank Nifty made long bearish candles on a daily chart.
  • While Nifty showed some support at the lower levels, Bank Nifty closed at the lower end of the trading range on Tuesday. Both Nifty and Bank Nifty breached the important support levels of 15645 and 35650 indicated in the previous notes.
  • Nifty actually went as low as 15578, it actually picked some support and closed marginally below this support level. Bank Nifty however, di not get much support and closed at 34415, much below 35650.
  • The levels of support for Nifty and Bank Nifty would be as below :
    • Nifty 15578 (Tuesday low), 15505, 15450
    • Bank Nifty 34357 (Tuesday low), 33937
  • While the sentiment in the global markets has changed. With Europe and US both showing a strong recovery from the lows of Monday, this could lead to a green opening tomorrow. Important is to watch if we also consolidate and recover from the levels mentioned above.
  • Over the last two days of trading, Indices have been heavily shorted by FII. They also sold in cash and have bearish positions in options. A strong opening tomorrow and sustenance at those levels could actually trigger a strong short covering as well. 
  • On the way up, i see resistance at the levels below :
    • Nifty 15700, 15770
    • Bank Nifty 34700, 35000
  • Above these levels the indices are strong again. I personally see Bank Nifty a bit more weaker than Nifty. This feeling due to the price action, Options OI and Banking results. After HDFC Bank, Bajaj Finance and Bajaj Finserve results are also weak. May lead to some weakness in Banking sector.
  • Important to watch the Nifty range of 15578 - 15700 and Bank Nifty range of 33900 - 35000. A breach of this range on either side may indicate some more momentum in that direction.
  • The Dollar Index momentarily breached the important 93 mark, but then corrected and is now lower. US yields are within range.
  • Covid cases globally would continue to keep some pressure and volatility in the market.

1. FII were net sellers for 2834 Cr today, while DII were buyers for 873 Cr. A net selling of 1961 Cr from the institutional side.

2. FII's Unwound 5676 longs and created 16657 shorts on the indices

3. On the option front FII  sold 59031 calls and   unwound 17194 puts. They also bought 77762 calls and  bought 33633 Puts.

4. For next week expiry, Nifty has the highest OI for PE at 15500 followed by 15600 and highest OI for CE is at 15800 followed by 15700. Highest Put writing was seen at no reasonable level and highest call writing was seen at 15700 levels.

5. For the next week expiry, Bank Nifty has the highest OI for PE at 33500 followed by 34500 and highest OI for CE is at 36000 followed by 35000. Highest Put writing was seen at no reasonable level and highest call writing was seen at 34500 levels. 

6. Asian markets closed in red yesterday and mixed today while Europe closed in green on both days

7. US markets closed in green yesterday and trading in green today

8. The breadth of the market was extremely weak yesterday

9. Nifty opened at 15703 and made an intra day high of 15728 and a low of 15578 before closing at 15632 .The range of Nifty for the day was 150 points.

10. Bank Nifty opened at 34791 and made an intra day high of 34894 and a low of 34357 before closing at 34415 .The range of Nifty for the day was 537 points.

11. US Dollar Index is trading at 92.785

12. Except FMCG all sectors closed in red.

13. India VIX increased to 13.21

14. US 10Y yields are at 1.285

15. Nifty futures saw short buildup

16. Bank Nifty saw short buildup


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