4th Feb' 2022 (Evening)

4th Feb' 2022 (Evening)  --  | Written on 6th Feb' 2022 at 9.00 PM |

  • Indices on Friday opened mildly in green and made small gains before getting sold off to slide gradually. Though there were some attempt by the bulls periodically, they could not hold and indices kept getting sold off. The indices made bearish candles on the daily chart and closed at day lows.
  • Both Indices closed above the important supports mentioned on Thu. While Bank Nifty did breach the first support intraday, it did recover and closed above it. Since the second support of Bank Nifty is protected and it closed above the first support, I would consider this positively.
  • Let us look at the levels first and then we discuss further.
  • Nifty
    • Support
      • First support at 17450
      • Second support at 17250
    • Resistance
      • First resistance at 17575
      • Second resistance at 17700
  • Bank Nifty
    • Support
      • First support at 38550
      • Second support at 38325
    • Resistance 
      • First resistance at 38900
      • Second resistance at 39275
  • I feel for Nifty to get back into growth trajectory, 17700 has to be taken down and for Bank Nifty to rise further, 39275 has to be taken down. 
  • Both indices have consolidated at the current level and are just above their current supports and taking a bet to go long with a stop loss at the first support above, offer a good risk reward to make a quick buck. A risky bet though. Also watch the opening before plunging.
  • FII sold again for 2000Cr plus and DII bought for 600Cr. However, the FII unwound a large number of shorts on Index and this is good sign for possibly a support coming in. 
  • Dollar Index has eased further and closed at 95.455, some more easing here could help fuel our markets. The US yields have however risen and are now above 1.9 again, so this still poses a risk of flight of foreign capital.
  • Options OI indicate a support at 17500 and 38500 for Nifty and Bank Nifty respectively. Though on the upside call writing was seen at 17800 and 39000 levels for Nifty and Bank Nifty. Watch for a breach of the first supports above as that could trigger call writing and also some fresh shorting on the Index.
  • Nifty saw long unwinding and Bank Nifty saw a short buildup on Index futures. So keep this at the back of mind while trading the indices. 
  • With Nasdaq showing a sharp reflex on Friday, this could trigger a move on the IT pack. I am currently holding positions on the IT stock futures. Hope i gat a good move tomorrow and gat an opportunity to book a decent profit.
  • On the economic events this week, watch for
    • Wed - RBI interest decision Thu - US core CPI and jobless claims Fri - British GDP and commentary from central bank also FED monetary policy report.
  • The RBI interest decision would be important to watch and also the commentary.
  • Important results this week would be in the auto space with Eicher, M&M and Hero motocorp results this week.
  • Wish you a happy trading week ahead....

1. FII were net sellers for 2267 Cr today, while DII were buyers for 621 Cr. A net selling of 1646 Cr from the institutional side.

2. FII's created 1863 longs and unwound 18453 shorts on the index futures

3. On the option front FII  created 81171 short calls and   created 73193 short puts. They also bought 85931 long calls and  bought 80360 long Puts.

4. For next week expiry, Nifty has the highest OI for PE at 17500 followed by 17000 and highest OI for CE is at 17800 followed by 18000. Highest Put writing was seen at 17500 and highest call writing was seen at 17800 levels.

5. For the next week expiry, Bank Nifty has the highest OI for PE at 38000 followed by 39000 and highest OI for CE is at 40000 followed by 39500. Highest Put writing was seen at 38500 and highest call writing was seen at 39000 levels. 

6. Asian markets closed mostly in green and Europe closed inr red on Friday

7. US markets closed mixed, with Dow closing flat and Nasdaq closing inn green

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

9. Nifty opened at 17590 and made an intra day high of 17617 and a low of 17462 before closing at 17516 .The range of Nifty for the day was 155 points.

10. Bank Nifty opened at 39128 and made an intra day high of 39278 and a low of 38562 before closing at 38789 .The range of Nifty for the day was 716 points.

11. US Dollar Index is trading at 95.455

12. Metals closed in green, FMCG and IT closed flat and all other sectors closed in red

13. India VIX eased to 18.8975

14. US 10Y yields are at 1.916

15. Nifty futures saw long unwinding

16. Bank Nifty futures saw short buildup

17. US Brent oil eased to 92.78

18. USD / INR eased to 74.645


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