21st Jan' 2022 (Evening)

21st Jan' 2022 (Evening)  --  | Written on 23rd Jan' 2022 at 9.00 PM |

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  • seeing the strong sentiment in US on Thu evening, I was expecting the markets to open a bit strong on Friday. However, a sharp fall of all US Indices from their highs led to a decline in the sentiment on our streets also. 
  • I mentioned on Friday morning that the US markets are entering into sell on rise mode and this would definitely put pressure on our markets as well.
  • Both Nifty and Bank Nifty made Doji candles on the daily chart. The reaction to the further slip in the US on Friday would reflect on our markets tomorrow. 
  • It would be important to note that while Nasdaq, Dow and S&P are 15%, 7% and 8% away from their all time highs. Nifty and Bank Nifty are 5.3% and 10% away. 
  • On a weekly chart, both Nifty and Bank Nifty have made a bearish engulfing candles and market has to, now,  hunt for a support. 

  • Nifty 
    • Support
      • First support at 17475
      • Second support at 17350
    • Resistance
      • First resistance at 17700
      • Second resistance at 17825
  • Bank Nifty
    • Support
      • First support at 37250
      • Second support at 37000
    • Resistance 
      • First resistance at 37750
      • Second resistance at 38050
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  • FII again sold for 3148Cr and this relentless selling just continues. They also shorted on Index futures, though for a small amount. They however sold more puts than Call on Index. So some base seems to be sitting there.
  • The Price action on Friday indicated some uncertainty on the direction ahead. The US Futures opening tomorrow, would give impetus to the direction the market takes tomorrow. 
  • I personally feel that Nifty would definitely touch 17350 before it makes a reasonable turn and Bank Nifty may test 37000. A breach of these levels could make some serious selling again, a reality.
  • While I would advice the cash investors to keep invested and buy on dips, for leveraged and derivative traders, i think for at the moment market is directionless and they need to wait for confirmation for fresh trades. 
  • I personally feel that Bank Nifty seems to be stronger than Nifty at the moment. A good set of results by Banks is also supporting the Index as of now. 
  • Banking, Auto and Energy seem to be relatively stronger indices.
  • Dollar Index is at 95.6 and is still above its support at 95.5. So this would keep the nerves high. Would have to wait to see coming below 95.5
  • US Yields eased slightly to 1.770. Is still in the range 08 1.7-1.8. Nothing much changed here.
  • Options OI currently indicate a higher trading range on Nifty and bets are places on both sides. a trading range of 17000-18000 on Nifty and 37000-38000 on Bank Nifty.
  • Economic events this week :
    • Mon - German Mfg PMI, British Composite, mfg and services PMI
    • Tue - German Business climate Index
    • Wed - India off, US New home sales
    • Thu - US heavy with FOMC minutes, Interest rate, Q4 GDP and jobs data.
    • Fri - German GDP
  • Important Results 
    • Mon - ITC, Fri - Dr Reddy
  • Expect a volatile week ahead. 26th Jan being an off, it would be truncated week.
  • Happy trading guys....

1. FII were net sellers for 3148 Cr today, while DII were buyers for 269 Cr. A net selling of 2879 Cr from the institutional side.

2. FII's unwound 2417 longs and created 4755 shorts on the index futures

3. On the option front FII  sold 39424 calls and   sold 53496 puts. They also bought 46595 calls and  bought 55137 Puts.

4. For next week expiry, Nifty has the highest OI for PE at 17000 followed by 17500 and highest OI for CE is at 18000 followed by 18500. Highest Put writing was seen at 17000-17600 and highest call writing was seen at 17600-18200 levels.

5. For the next week expiry, Bank Nifty has the highest OI for PE at 37000 followed by 37500 and highest OI for CE is at 38000 followed by 38500. Highest Put writing was seen at 37500 and highest call writing was seen at 37500 levels. 

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

7. US markets closed in red on Friday

8. The breadth of the market was extremely weak  today

9. Nifty opened at 17613 and made an intra day high of 17707 and a low of 17485 before closing at 17617 .The range of Nifty for the day was 222 points.

10. Bank Nifty opened at 37522 and made an intra day high of 37741 and a low of 37224 before closing at 37574 .The range of Nifty for the day was 517 points.

11. US Dollar Index is trading at 95.620

12. Except FMCG almost all sectors closed in red

13. India VIX eased to 18.8875

14. US 10Y yields are at 1.770

15. Nifty futures saw short buildup

16. Bank Nifty futures saw long unwinding

17. US Brent oil eased to 87.08

18. USD / INR eased to 74.420

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