19th Oct' 2021 (Evening)

19th Oct' 2021 (Evening)  -- | Written at 11.00 PM |

  • As mentioned yesterday, Indices consolidated and are probably in the process of making a new trading range.
  • Markets opened gap up and within an hour was sold off, On Nifty for 200 points and on BankNifty for 650 points. Nifty and BankNifty picked up support From 18400 and 39400 respectively to reattempt the days high, but failed again and settled to close to days low.
  • Both Nifty and Bank Nifty made bearish engulfing candle on the daily chart, and since intraday the day high was tested twice, The highs would now tend to be strong hurdles at least in short term. Though the lows were supported, they need to be respected in the upcoming trading sessions, if the indices have to prevent further slipping.
  • Nifty
    • Support
      • First support at 18375
      • Second support at 18260
    • Resistance 
      • First resistance at 18525
      • Second resistance at 18600
    • If 18260 is not respected, Nifty may tend to correct deeper and we may see 18050 levels again. As of now, I would buy these dips. The position size can be as per individual risk appetite.
  • Bank Nifty
    • Support
      • First support at 39425
      • Second support at 39175
    • Resistance
      • First resistance at 39750
      • Second resistance at 40000
    • As mentioned for Nifty above, a breach of the second support at 39175 may lead to a sharp dip to 38800.
  • I have mentioned the third supports below second supports for reference only, i do not really expect them to become relevant just as of now.
  • FII sold for 500Cr in cash market and the DII complimented them by selling a whopping 2500Cr plus. The profit booking in the cash market triggered the dip yesterday. Though on the FnO side, FII have created a large number of longs on Index futures. These seemed to be hedged by creating an equivalent number of shorts on the stock futures.
  • Their positions on the Index options indicate a readiness to play some volatility. So be ready. Anyways the VIX continues to be above 17 and has expanded further to provide that extra thrill.
  • I would generally the trading range to widen and provide a wider range to play coupled with an opportunity for the late entrants to get into by buying the dips. So make use of the opportunity. The general bullish trend is intact.
  • The options OI indicate a trading range of 18400-18600 for Nifty and 39500-40000 for Bank Nifty. I would advise the option sellers to be call heavy for the current week. Levels have to be picked up as per individual trading style.
  • Globally the US markets were strong yesterday and Asian markets also closed in green. This morning the Cues are mixed. While the handover from US was strong, the cues from Asian markets is mixed. US futures are trading flat.
  • Dollar index is stable and the yields have increased a bit. Nothing to worry as of now.

1. FII were net sellers for 505 Cr today, while DII were sellers for 2578 Cr. A net selling of 3083 Cr from the institutional side.

2. FII's created 22422 longs and created 3322 shorts on the index futures

3. On the option front FII  sold 61848 calls and   sold 5369 puts. They also bought 44319 calls and  bought 29375 Puts.

4. For next week expiry, Nifty has the highest OI for PE at 18300 followed by 18000 and highest OI for CE is at 18600 followed by 18500. Highest Put writing was seen at 18400 and highest call writing was seen at 18600 levels.

5. For the next week expiry, Bank Nifty has the highest OI for PE at 38000 followed by 39500 and highest OI for CE is at 40000 followed by 41000. Highest Put writing was seen at 39500 and highest call writing was seen at 40000 levels. 

6. Asian markets closed mostly in green and Europe closed mixed

7. US markets closed trading in green.

8. The breadth of the market was negative today

9. Nifty opened at 18602 and made an intra day high of 18604 and a low of 18377 before closing at 18418 .The range of Nifty for the day was 227 points.

10. Bank Nifty opened at 39927 and made an intra day high of 40011 and a low of 39394 before closing at 39540 .The range of Nifty for the day was 617 points.

11. US Dollar Index is trading at 93.737

12. Except IT all sectors closed in red today

13. India VIX increased to 17.38

3814. US 10Y yields are at 1.630

15. Nifty futures saw short buildup

16. Bank Nifty saw short buildup


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