13th May' 2022 (Evening)

13th May' 2022 (Evening)  --  | Written on 15th May' 2022 at 9.00 PM |

• Opening gap up on Friday, the indices for some time gave a feeling of picking support, however, these hopes were washed in the last two hours with Nifty, almost vertically, falling for 340 points and Bank Nifty falling for 1000 points. 
• On the daily chart, Nifty created a candle almost similar to the previous way, while Bank Nifty created a strongly bearish candle.
• Now let us look at the levels first, and then we will discuss further :
• Looking at the levels closely. Nifty is positioned at a very important level. I feel from this level one leap of faith can be taken with the level of 15650 as a stop loss. This will be however for 250 points as Nifty is still sitting with a strong resistance at 16000-16100 levels. Any reasonable strength can only build only if Nifty starts closing above these levels.
• The strategies can be taken as per ones individual trading style. On the flip side, While I do not expect it to happen immediately, If Nifty starts to take out 15650, we may see a deeper trouble, as I feel that many important indices and stocks are still weak.
• Bank Nifty I feel is still weak and may see 32000 before picking support. If however, Bank Nifty starts going below 32150, we may see a lot more pain. 
• Now this view is also driven from the way HDFC Bank is positioned as of now. Bank Nifty is positioned exactly at the major support levels as of now. The first support is cryptically mentioned below the Second support and strong base, as these levels if taken down the next supports come in much lower and this will drag the Bank Nifty index much lower.
• If we look at ICICI Bank, it seems weaker as well. So both of these ICICI Bank and HDFC Bank can put pressure on Bank Nifty.
• Many major stocks and Indices are still very weak. eg. Reliance, IT Index, Bank Nifty Index (As mentioned above), Metals are all seemingly weak. 
• FII on Friday sold for 3780 Cr and DII bought 3169Cr from this. On the futures side, though the FII created longs and also unwound a good number of shorts on the Index futures. While this is a good sign in short term, this may be drive from the fact that Nifty is at critical levels and a strong bullish stance may be expected from the DII. I will wait to see if the levels on Monday to conclude my take on it.
• Looking at the way markets closed globally, we may see a gap up opening on Monday and i would ideally watch the global cues coming in tomorrow morning and the price action tomorrow morning.
• Oil prices are again high at 111 USD and the Dollar Index is uncomfortably at 104.5. The US yields are at 2.9. So all of these do not give much comfort anyways.
• Calling it a short story, other than the Nifty levels and FII futures position, nothing else actually gives a reason for a recovery. So I do not expect a major recovery, a small pull back till 16000 may happen.
• Options OI indicate weakness. With extremely weak put writing, they do not really indicate a good support. Though a strong resistance is seen at 16000 and 34000 for Nifty and Bank Nifty respectively.
• Watch for these events next week : Mon - Chinese Industrial production and BOE treasury commentary Tue - British earnings index, US core retail sales, FED chair speech Wed : British CPI, US building permits and crude inventories Thu : US jobless claims Fri : Chinese rate and British retail sales.
• Wish you a happy trading week ahead....

1. FII were net sellers for 3780 Cr today, while DII were Buyers for 3169 Cr. A net selling of 611 Cr from the institutional side.

2. FII's created 8879 longs and unwound 26778 shorts on the index futures

3. On the option front FII  created 707 short calls and   unwound 10925 short puts. They also created 5510 long calls and  unwound 30975 long Puts.

4. For next week expiry, Nifty has the highest OI for PE at 15500 followed by 15800 and highest OI for CE is at 16000 followed by 16100. Highest Put writing was seen at no reasonable levels and highest call writing was seen at 16100 levels.

5. For the next week expiry, Bank Nifty has the highest OI for PE at 32500 followed by 32000 and highest OI for CE is at 34000 followed by 34500. Highest Put writing was seen at 32000-32500 and highest call writing was seen at 34000 levels. 

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

7. US markets closed in green on Friday

8. The breadth of the market was strong today

9. Nifty opened at 15977 and made an intra day high of 16083 and a low of 15740 before closing at 15782 .The range of Nifty for the day was 343 points.

10. Bank Nifty opened at 33925 and made an intra day high of 34002 and a low of 33007 before closing at 33121 .The range of Bank Nifty for the day was 995 points.

11. US Dollar Index is at 104.510

12. Auto, Pharma and FMCG made gains, while Metals, Banking lost ground.

13. India VIX eased to 23.4850

14. US 10Y yields are at 2.928

15. Nifty futures saw longunwinding

16. Bank Nifty futures saw long unwinding

17. US Brent oil increased to 1111.22

18. USD / INR increased to 77.487