31st Dec' 2021 (Evening)

31st Dec' 2021 (Evening)  --  |  Written on 1st Jan' 2021 at 9.20 PM  |

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  • Wow, what an encouraging day, it was. First day of the January series and it sent out good vibes. Lets understand this better in the notes below.
  • Lets look at some data points first. 
  • FII buying in cash was complimented by a synergetic stance on the futures and options side. Cash buying was supported by creation of 10888 longs on Index futures and also a good number of longs on Stock futures. Decent unwinding of short on stock futures. Writing of a two puts for ever call.
  • The options OI indicate a good amount of Put writing ATM and call writing at far OTM. Options OI indicate a support at 17300 for Nifty and 35500 for bank Nifty. 
  • On the charts, on weekly time frame, Nifty made a second consecutive bullish candle and closed above its 9WEMA. On the daily chart, it is now close to its previous resistance level of 17380. A follow up trade tomorrow, could help take this down and support a move towards 17640.
  • On the other hand, Bank Nifty has made its first bullish candle on the weekly chart after its recent swing low of 34018. It has now closed above 50WEMA. However, for a consistent strength, some more strength has to build. Being a high beta index, after Nifty showing strength and a follow up may trigger a strong move on Bank Nifty. However, let us understand some more pointers first.
  • The Dollar Index is now trading below 96 and is close to its support at 95.54. A breach of this level would be helpful for our markets and inject some more strength, complimenting the pointers above.
  • US yields made a double top at 1.7 and post that have pulled support twice at 1.34. So kind of a range exists here. A look at a lower time frame indicates a slide on the yields, may support us in short term. However, a breach of the range 1.34 to 1.7 has to be closely watched. 
  • Now with all these supporting pointers, the biggest one point posing a risk to the markets is the sharp spike in the Covid cases globally and more recently in India. The restrictions imposed by all states would affect the sentiment at the street, however, as they say the downturn comes when markets have no reason left to correct and the upside comes when there is no reason to go up.
  • The data supports and the sentiment may not. I would advice, this is the time to Invest. We can keep fishing the bottom, but i would stick my neck out now. Though, this is to be done in a planned way.
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  • The levels now :
  • Nifty 
    • Support
      • First support at 17325
      • Second support at 17180
    • Resistance 
      • First resistance at 17400
      • Second resistance at 17550
  • Bank Nifty
    • Support
      • First support at 35400
      • Second support at 34800
    • Resistance
      • First resistance at 35600
      • Second resistance at 35950
  • With the new year starting, this would also be a start of the earning season. First important week will be next week with some Wipro, Infy, HCLTEch and HDFC Bank lined up. It would provide some first feelers.
  • Monday would not see trading from UK, Australia, Canada and Japan. Tuesday will see Chinese, British and US Mfg PMI, Wed for US non farm employment data, Thus would see, FED minutes, British composite and services PMI, jobless claims from US. Fri would see non farm employment and jobless claims.
  • Wish everybody a happy new year and a prosperous 2022....

1. FII were net sellers for 575 Cr today, while DII were buyers for 1165 Cr. A net buying of 1740 Cr from the institutional side.

2. FII's created 10888 longs and created 719 shorts on the index futures

3. On the option front FII  sold 33431 calls and   sold 57551 puts. They also bought 18898 calls and  bought 37006 Puts.

4. For next week expiry, Nifty has the highest OI for PE at 17300 followed by 17200 and highest OI for CE is at 17500 followed by 17700. Highest Put writing was seen at 17300 and highest call writing was seen at 17300-17800 levels.

5. For the next week expiry, Bank Nifty has the highest OI for PE at 35000 followed by 34000 and highest OI for CE is at 35500 followed by 36000. Highest Put writing was seen at 35500 and highest call writing was seen at 35500 levels. 

6. Asian markets closed mixed today. Europe closed mostly in red

7. US markets closed in red on Friday

8. The breadth of the market was extremely strong on Friday

9. Nifty opened at 17244 and made an intra day high of 17400 and a low of 17238 before closing at 17354 .The range of Nifty for the day was 162 points.

10. Bank Nifty opened at 35114 and made an intra day high of 35596 and a low of 35113 before closing at 35481 .The range of Nifty for the day was 483 points.

11. US Dollar Index is trading at 95.635

12. Led by Metals and Auto, almost all sectors closed in green

13. India VIX eased to 16.2225

14. US 10Y yields are at 1.512

15. Nifty futures saw short covering

16. Bank Nifty futures saw short covering

17. US Brent oil eased to 77.86

18. USD / INR eased to 74.486


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