17th Dec' 2021 (Evening)

17th Dec' 2021 (Evening)  -- | Written on 19th Dec' 2021 at 11.00 PM |

  • Indian Markets on Fri opened mixed with Nifty in green and Bank Nifty mildly in red. However, the sentiment was weak and the indices continuously got sold and closed at the lower levels of the day. 
  • The Global Cues on Friday were mixed, however, the sentiment was extremely weak. Usual FII selling added pessimism and the markets inspite of just 500Cr of institutional selling lost close to 250 points on Nifty and 930 points on Bank Nifty.
  • On a weekly chart Nifty continued to make a higher high and a higher low for the third consecutive week, though this was not the case with Bank Nifty and Bank Nifty made a lower low in this week. 
  • Both the Indices are now trading close to their recent swing lows and this is a vital moment for the indices. It could either bounce back from here with a very attractive risk reward or it could also break down from here and a breach of the recent swing lows of 16780 on Nifty and 35325 on  Bank Nifty could put the indices under a fresh selling spree and severe pressure.
  • I personally feel that trying a long with the recent swing lows as stop losses, could be a good strategy. One may try and improve this risk reward by waiting a little more as well, however this has to be decided after seeing the opening price action and global cues tomorrow.
  • Nifty 
    • Nifty opened mildly in green but then was sold off heavily till a bit of support at 17000, but then the second bout of selling took off this support and closed below it.
    • Support
      • First support at 16890
      • Second support at 16780
    • Resistance
      • First resistance at 17100
      • Second resistance at 17275
  • Bank Nifty
    • Bank Nifty opened mildly in red but then moved pretty much like Nifty.
    • Support
      • First support at 35550
      • Second support at 35325
    • Resistance 
      • First resistance at 35950
      • Second resistance at 36600
  • On both the indices, if the first resistance is taken down, there is a high chance of a sharp short covering till the second resistance level mentioned. As mentioned above, watch the opening price action and global cues closely.
  • FII again sold for 2000Cr, Whereas the DII absorbed a selling of 1500Cr from this, the sentiment was so weak that the indices lost 1.5% and 2.5% each on Nifty and Bank Nifty.
  • The options OI indicate a Call heavy structure and this indicates a n extremely over sold markets. Though some support is indicated at 17000 and 36000 as of now.
  • Dollar Index is at 96.645 and US Yields at 1.407 are in a reasonable range as of now.
  • Watching the Dollar Index and USD/INR would be vital. USD at 76.013 continues to be a concern. Watch for a slide below 76 towards 75.5, that would help, if happens ( Disclaimer : I am not a currency expert).
  • Amongst the events this week, the most important was the FED outcome.  Watch for Central Bank decisions from CHina , Australia, and Japan. GDP data from US and Britain, Consumer confidence from US, Jobless claims from US. Most of the markets would be closed on Friday.
  • Wish you a happy trading week ahead....

1. FII were net sellers for 2069 Cr today, while DII were buyers for 1478 Cr. A net selling of 591 Cr from the institutional side.

2. FII's unwound 1862 longs and created 3449 shorts on the index futures

3. On the option front FII  sold 121314 calls and   sold 114967 puts. They also bought 78006 calls and  bought 104200 Puts.

4. For next week expiry, Nifty has the highest OI for PE at 17000 followed by 16500 and highest OI for CE is at 17300 followed by 17500. Highest Put writing was seen at 17000 and highest call writing was seen at 17200 levels.

5. For the next week expiry, Bank Nifty has the highest OI for PE at 36000 followed by 35000 and highest OI for CE is at 37000 followed by 36000. Highest Put writing was seen at 36000 and highest call writing was seen at 36000 levels. 

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

7. US markets closed mixed with Dow in red and Nasdaq kind of flat

8. The breadth of the market was extremely weak today

9. Nifty opened at 17276 and made an intra day high of 17298 and a low of 16966 before closing at 16985 .The range of Nifty for the day was 332 points.

10. Bank Nifty opened at 36491 and made an intra day high of 36550 and a low of 35535 before closing at 35618 .The range of Nifty for the day was 1015 points.

11. US Dollar Index is trading at 96.645

12. Except IT all sectors closed in red

13. India VIX increased to 16.3375

14. US 10Y yields are at 1.407

15. Nifty futures saw short buildup

16. Bank Nifty futures saw short buildup


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