14th Oct' 2021 (Evening)

14th Oct' 2021 (Evening) -- | Written on 17th Oct' 2021 at 9.00 PM  |

  • The momentum in our markets on Thursday was phenomenal. It has been surprising me from the last two days. 
  • While the data is definitely bullish from FII side, the real reason is the enthusiasm of retail participants on the domestic front. FII bought for 1681Cr on Thursday, but their buying was negated by a strong selling of 1750Cr from the DII side. We still saw an extremely strong market.
  • FII covered their shorts and created fresh longs. In this series they have unwound approx 25000 Index future shorts and created 4000 plus index future longs. As mentioned in my notes on Wed, out of the three reasons, the first reason probably is playing true and the second reason (refer my notes on Wed) has given them the reason to cover.
  • DII as of now are not supporting the high valuations. With the earning season already started and some of the Important results in the IT and Banking space out, lets see the DII position tomorrow. I believe they already positioned themselves for this.
  • The DII buying was coming in at 17500 earlier and they were selling at 17900,  with the expansion of both indices, this range may now move up by 500 points. The new range could be something like 17900-18500. Lets see.
  • On the earnings front it was a mixed bag with a strong set of results coming in from Infosys, bad from Wipro and ok types from HCL. On the banking side HDFC results were extremely strong. Question is How much is already in the price?. Anticipation of good results has already fired the stock.
  • The Dollar Index has eased to below 94 now, while the Yields in US still remain close to 1.6 (though below it). However, the Oil has fired to above 84USD again and that is not a good sign.
  • Nifty
    • Nifty opened gap up and backed by a strong buying from FII it continuously gained to close strong close to day high. It made a strong bullish candle on the daily chart.
    • Technically Nifty is in a strong momentum on all charts viz. Monthly, weekly and daily.
    • Support
      • First support at 18250
      • Second support at 18150
    • Resistance 
      • First resistance at 18350 (Chances are it may open above this)
      • Second resistance -- Cannot predict. (If history is anything to pick clue from, 18500)
    • Nifty range has widened a bit and the violent expansion may increase the trading range a bit. Though this is not indicated by VIX as of now.
    • At these levels I would go thin and hedged.
  • Bank Nifty 
    • Bank Nifty also opened gap up and then gained violently. Closing near to day high, making a strong bullish candle on the daily chart.
    • Support 
      • First support at 39175
      • Second support at 38800
    • Resistance 
      • First resistance at 39400 (may go off in the opening tomorrow)
      • Second resistance difficult (however, looking at history, i may expect 39800)
  • On Thursday when our markets closed, since then we have seen a 800 Point move on Dow, 200plus move on Nasdaq. So i feel our markets have a run way to catch up. I would expect a gap up opening tomorrow.
  • The bigger question is, should we buy from there, my answer is NO. I would wait to see if it sustains. You decide yours and be cautious.....
  • Next week events : 
    • Mon - Chinese GDP and Industrial production
    • Tue - Bank of England speech.
    • Wed - British CPI
    • Thu - Initial jobless claims from US
    • Fri - German manufacturing PMI
  • Wish you a very happy trading week ahead.....

1. FII were net buyers for 1681 Cr today, while DII were sellers for 1750 Cr. A net selling of 69 Cr from the institutional side.

2. FII's created 11529 longs and unwound 2745 shorts on the index futures

3. On the option front FII  sold 95371 calls and   sold 75222 puts. They also bought 98542 calls and  bought 75358 Puts.

4. For next week expiry, Nifty has the highest OI for PE at 18100 followed by 18000 and highest OI for CE is at 18500 followed by 18700. Highest Put writing was seen at 18300 and highest call writing was seen at 18500-18800 levels.

5. For the next week expiry, Bank Nifty has the highest OI for PE at 38500 followed by 39000 and highest OI for CE is at 40000 followed by 39500. Highest Put writing was seen at 39000 and highest call writing was seen at 39500-40000 levels. 

6. Asian markets closed in green and Europe also closed in green on both Thu and Friday

7. US markets closed in green on both Thu and Friday

8. The breadth of the market was positive on Thursday

9. Nifty opened at 18272 and made an intra day high of 18350 and a low of 18248 before closing at 18338 .The range of Nifty for the day was 102 points.

10. Bank Nifty opened at 38684 and made an intra day high of 39375 and a low of 38673 before closing at 39340 .The range of Nifty for the day was 702 points.

11. US Dollar Index is trading at 93.960

12. Except Auto everything closed in green

13. India VIX reduced to 15.77

3814. US 10Y yields are at 1.574

15. Nifty futures saw Short covering

16. Bank Nifty saw Short covering


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