20th Sep '2021 (Evening)

20th Sep '2021 (Evening)  --  | Written at 11.00 PM |

  • As mentioned yesterday, following global cues, Indian indices opened weak today. However, they made some decent recovery before being sold off heavily. The indices closed at lower levels of the day.
  • Nifty
    • Nifty opened 140 points lower, made a strong recovery and got in the green zone, before being beaten down again to close 188 point lower.
    • Nifty made a strong bearish candle with a large upper shadow on the daily chart. This indicates a sharp rejection from these highs and a strong resistance at that level.
    • Whether this proves to be trend reversal, is yet to be proven. I am not bearish as of now and would wait for some critical levels before making my decision
    • Support
      • First support at 17250
      • Second support at 17150
    • Resistance 
      • First resistance at 17500
      • Second resistance at 17625
    • As mentioned yesterday, Nifty has now established a wider trading range. An increased VIX is the indication as well, Reasons are driven from a global risk off sentiment triggered due to various reasons discussed below.
  • Bank Nifty
    • Bank Nifty trend was very similar to Nifty today, though the weakness initially was higher in Bank Nifty compared to Nifty. It opened 400 points lower, made a decent recovery but was sold off heavily and settled 666 point lower at 37145.
    • Bank Nifty made a strong bearish candle with a long upper shadow, indicating a sharp rejection of the highs and this would be decent resistance going forward..
    • Support
      • First support at 36925
      • Second support at 36500
    • Resistance
      • First resistance at 37550
      • Second resistance at 37800
  • FII buying, though for a very small amount today is a good sign. DII sold again for a good 1600Cr. As mentioned, this is a classic equation to form a range for the markets. 
  • The new range formed for Nifty is 17150 to 17750 for Nifty and 36925 to 37800 for Bank Nifty.
  • The options OI indicate a support at 17200 for Nifty and 37000 for Bank Nifty, while a resistance at 17800 for Nifty and 37500 for Bank Nifty.
  • The Dollar Index has stayed put at yesterday's level inspite of the volatility we are seeing, indicating a violent shakeout happening. The sentiment risk off is driven from multiple perspectives viz the Evergrande saga from China, a concern for a potentially higher corporate taxation through may be a higher capital gain rate, a fear of a slow down in Chinese economy, Commodity stocks taking the first hit as they had risen too much as well and finally the most important trigger, the FOMC meet on Wednesday. Driven from all these reasons, the market is nervous ahead of the announcements from the Fed meet. 
  • A correction at this stage cannot be ruled out, though the critical levels are yet to be reached for the same. I firmly believe, Nifty below 17050 and Bank Nifty below 36200 will be vulnerable to a deeper correction. I would buy the dips till then. The leverage can be adjusted to individual risk appetite. 
  • While the levels mentioned are in themselves 5% below the recent highs and then that is the thrill of trading when the VIX is closing on 17% plus levels. :-)

1. FII were net buyers for 92 Cr today, while DII were sellers for 1626 Cr. A net selling of 1534 Cr from the institutional side.

2. FII's unwound 16547 longs and created 11843 shorts on the index futures

3. On the option front FII  sold 7157 calls and   unwound 10123 puts. They also sold long 26056 calls and  bought another 2729 Puts.

4. For next week expiry, Nifty has the highest OI for PE at 17000 followed by 17400 and highest OI for CE is at 18000 followed by 17800. Highest Put writing was seen at 17200-17400 and highest call writing was seen at 17500 levels.

5. For the next week expiry, Bank Nifty has the highest OI for PE at 37000 followed by 36000 and highest OI for CE is at 38000 followed by 37500. Highest Put writing was seen at 37000-37200 and highest call writing was seen at 37500 levels. 

6. Asian markets closed in red and Europe also closed in red.

7. US markets trading in deep red as of now.

8. The breadth of the market was extrememly negative today

9. Nifty opened at 17443 and made an intra day high of 17622 and a low of 17361 before closing at 17396 .The range of Nifty for the day was 261 points.

10. Bank Nifty opened at 37388 and made an intra day high of 37802 and a low of 37068 before closing at 37145 .The range of Nifty for the day was 734 points.

11. US Dollar Index is trading at 93.267

12. Except FMCG all sectors closed in red

13. India VIX increased to 17.49

14. US 10Y yields are at 1.297

15. Nifty futures saw long unwinding

16. Bank Nifty saw short buildup


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