24th Jan' 2022 (Evening)

24th Jan' 2022 (Evening)  --  | Written at 11.30 PM |

  • Markets opened to extremely weak global cues and opened gap down. A continuous relentless selling was seen since the opening and the Indices fell to a low of 16997 and 36375 on Bank Nifty. While Bank Nifty saw a reasonable recovery from the lows, Nifty kind of closed marginally above the lows.
  • Almost all Global markets are seeing a sell off due to the concerns arising from the FED rate rise expectations and the Russia Ukraine tensions. US markets are currently trading 3-4% down. If the closing is as deep in US, we may see a serious gap down opening tomorrow and that could trigger further selling.
  • Nifty 
    • Support
      • First support at 17825
      • Second support at 16675
    • Resistance
      • First resistance at 17275
      • Second resistance at 17650 ( does not seem to be relevant as yet)
  • Bank Nifty
    • Support
      • First support at 36375
      • Second support at 35400
    • Resistance 
      • First resistance at 37075
      • Second resistance at 37750 (Does not seem to be relevant as yet)
  • With the kind of selling seen and the global threats posing, there is a serious threat of the second supports getting breached above. This could lead the Indices directly to the lows we was in the current correction. Lets see...
  • FII again sold heavily in cash and shorted the Index futures. They also sold a huge number of call options on Index. Indices are now showing a heavy short buildup. While this is a bearish indication, a reversal of the sentiments could trigger a heavy short covering. 
  • Markets as mentioned yesterday, would remain extremely volatile. The Volatility Index today short up to 22.85 (Intraday it was above 24). So expect sharp movements on both sides.
  • Normally, for options traders this is extremely risky, unless one is highly skilled on this domain. So, while i advice all cash investors to keep investing in a phased way, i would not advice leveraged options traders to burn hands. Though, aggressive, skilled adventurers can make a decent money in this market. 
  • While technicals are important, the market could behave news based and that may give surprises. Some hedged, directional strategies could work and I have put them to good use.
  • Options OI today show a heavy call writing and practically no put writing. So difficult to project support levels.
  • German mfg PMI was strong today, while the British data was mostly weak.
  • Remember, this is a news based markets and not a technical market. Also, it is not a bear market, it is a deep correction.

1. FII were net sellers for 3751 Cr today, while DII were buyers for 74 Cr. A net selling of 3677 Cr from the institutional side.

2. FII's unwound 7564 longs and created 10270 shorts on the index futures

3. On the option front FII  sold 87739 calls and   sold 16068 puts. They also bought 118838 calls and  bought 51449 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 18000 followed by 17500. Highest Put writing was seen at no reasonable level and highest call writing was seen at 17500 levels.

5. For the next week expiry, Bank Nifty has the highest OI for PE at 36000 followed by 37000 and highest OI for CE is at 38000 followed by 37500. Highest Put writing was seen at 36000 and highest call writing was seen at 37500 levels. 

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

7. US markets trading in deep red

8. The breadth of the market was extremely weak  today

9. Nifty opened at 17575 and made an intra day high of 17599 and a low of 16997 before closing at 17149 .The range of Nifty for the day was 602 points.

10. Bank Nifty opened at 37601 and made an intra day high of 37694 and a low of 36375 before closing at 36947 .The range of Nifty for the day was 1319 points.

11. US Dollar Index is trading at 95.925

12. Led by Metals and realty all sectors closed in red

13. India VIX increased to 22.8250

14. US 10Y yields are at 1.724

15. Nifty futures saw short buildup

16. Bank Nifty futures saw short buildup

17. US Brent oil eased to 85.02

18. USD / INR increased to 74.735


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