29th Oct' 2021 (Evening)
29th OCT' 2021 (Evening) -- | Written on 31st Oct' 2021 at 7.30 PM |
- Thrilling two days on our markets. Nifty lost 539 points from Wed close and Bank Nifty lost 1759 points from Wed close. Nifty and Bank Nifty Losing 4.7% and 6.5% respectively from their recent highs. A look at the table below will be interesting :
- While Nifty saw its ATH on last Monday, Bank Nifty saw that this Monday. On Friday, the breadth of the market was not that bad. Nifty fall was driven by Reliance, IT and Bank Nifty. On the other hand, amongst important sectors, while FMCG was flat, Auto, Metals and Pharma gained a bit. PSU Banks, Media and realty stocks also closed in green.
- There was a heavy shorting on Bank Nifty, but these could not get a follow through on Friday and the index picked support at lower levels. The first hour low created was not breached (Though it was double tested in the last hour).
- Same for Nifty, it was shorted heavily, however, a follow through of the shorts was not that aggressive, though the pull back on Nifty was not as strong as Bank Nifty. The First hour low on Nifty was double tested in the last hour.
- I have a strong feeling, that these lows could be short term lows and if they are not breached tomorrow in the first hour, a decent pull back is possible. So, keep an eye on Nifty 17615 and Bank Nifty 38426. These could be our strong support levels.
- Nifty
- Support
- First support at 17625
- Second support at 17475 ( probability a bit low for this to be tested)
- Resistance
- First resistance at 17765
- Second resistance at 17825
- Third resistance at 17925
- Nifty has to now protect 17475 and close above the three levels mentioned above, to resume its rise towards 18050 and then 18350 levels.
- Bank Nifty
- Support
- First support at 38800
- Second support at 38475
- Resistance
- First resistance at 39400
- Second resistance at 39775
- Bank Nifty seems a little more stronger than Nifty and the level to be protected by Bank Nifty is 38425, else we may see a deeper correction to 37775 levels. On the upside, levels to be watched are mentioned above. For it to resume its upward journey a close above 40500 is important.
- Technically the following levels are important for Nifty and Bank Nifty ie a 20 DEMA of 17980 on Nifty and 39725 on Bank Nifty. While Bank Nifty is closer to this, Nifty has some gap to cover.
- FII on Friday sold for a whopping 5000Cr plus, the silver lining is though they bought in Index futures and created a hedge on the options side by buying and selling some calls. They however, also sold some puts, so prima facie there is an intention to play a range at these levels.
- DII however, bought at the lower levels and probably forced a support at the lower end of the trading range on Friday.
- A look at the Futures OI, indicates a shorting of Nifty in the first hour, they are yet to be covered. Bank Nifty on the other hand had shorting in the first hour and the shorts were forced to be covered. Hence, i feel Bank Nifty is stronger, though the levels above have to be protected.
- Dollar Index and US 10 Y yields are stable. Dollar Index is slightly above 94, however, do not see that as concern at the moment.
- US markets closed strong on Friday and that could help us tomorrow.
- The economic data was mostly strong in the last week. However, the GDP data from US and Germany surprised on the lower side. Chinese GDP today also is lower. This may put some pressure on the markets tomorrow. Let us keep an eye on the opening data tomorrow.
- This week following events are important : PMI data from China, Britain and US on Monday, Bank of Jap policy statement and German PMI on Tue, Fed meeting outcome on Wed. I would rate the FED event highest on impact, luckily that will happen after our weekly expiry on Wed (our markets are closed on Thu and Fri for Diwali).
- Expect volatility though.
- So, wish you a happy trading week ahead.......
1. FII were net sellers for 5142 Cr today, while DII were buyers for 4342 Cr. A net selling of 800 Cr from the institutional side.
2. FII's created 9242 longs and created 1730 shorts on the index futures
3. On the option front FII sold 108164 calls and sold 41565 puts. They also bought 108089 calls and bought 52988 Puts.
4. For next week expiry, Nifty has the highest OI for PE at 17500 followed by 17800 and highest OI for CE is at 18000 followed by 18500. Highest Put writing was seen at 17000-17700 and highest call writing was seen at 18000 levels.
5. For the next week expiry, Bank Nifty has the highest OI for PE at 39000 followed by 38000 and highest OI for CE is at 41000 followed by 42000. Highest Put writing was seen at 39000 and highest call writing was seen at 40000 levels.
6. Asian markets closed mixed on Friday and Europe also closed mixed on Friday
7. US markets closed in green on Friday
8. The breadth of the market was negative today
9. Nifty opened at 17833 and made an intra day high of 17915 and a low of 17613 before closing at 17671 .The range of Nifty for the day was 302 points.
10. Bank Nifty opened at 39424 and made an intra day high of 39775 and a low of 38426 before closing at 39115 .The range of Nifty for the day was 1349 points.
11. US Dollar Index is trading at 94.108
12. Reliance, IT and Bank Nifty were leading the fall today, rest of the sectors were not that weak.
13. India VIX eased to 17.425
3814. US 10Y yields are at 1.561
15. Nifty futures saw long unwinding
16. Bank Nifty saw long unwinding
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