18th May' 2022 (Evening)

18th May' 2022 (Evening)  --  | Written at 9.30 PM |

  • Markets today completed their pull back making a high of 16400 on Nifty and 34163 on Bank Nifty. I mentioned this in my notes yesterday, that the next level for Nifty is 16400. This happened and Nifty slipped to a low of 16211. Bank Nifty also made a low of 34134.
  • Both Nifty and Bank Nifty closed near the day lows, making strong bearish daily candles. While they are still making a higher high and a higher low, i believe this pattern may change tomorrow and we may see a slip on both the Indices.
  • Lets look at the levels :
  • So Nifty turned down today and is now on a lower time frame making a down trend. This has to stop above 16200. I doubt this would happen tomorrow as the US Indices are trading sharply lower and we may end up opening gap down tomorrow. So technically we again reach the same levels of  15725. If this is not held, we go back to where we were 2-3 days back.
  • Now what does this mean, if the Indices this time retest 15670, there is a high chance, this support will be taken down and we then the target  of 14600, I projected some days back (refer my tweet on May 1st), becomes relevant and we start moving towards it.
  • Now, will the DII come to rescue this time and support at those levels, I do not know. Maybe not, as the LIC IPO is done now and the market may be allowed to complete its cycle and then we may take a reasonable reversal from the levels of 14600-15000. This is a theory, please exercise your own analysis before taking any position.
  • FII sold for 1254Cr and DII bought for 375Cr today. On the futures side, the FII made some small number of Longs on Index futures and were bearish on the options side. So not expecting any major activity from them on the long side.
  • The Dollar Index has started inching up again after a brief decline. Yields have are also around 2.915. While the Oil prices have slightly eased, the Dollar Index is a concern. There seems to be a consensus in the US that the Dollar Index rise may touch 114. So the flight of capital may continue. 
  • This time any major fall in the equity market, may not get support from the central banks, so the resilience of our domestic Institutions may get tested here on.4
  • The expiry tomorrow may be interesting, lets see...
  • Options OI indicate a trading range of 16000 to 16500 and 34000 to 34500 for Nifty and Bank Nifty respectively. this range has a potential of being breached on the lower side. 

1. FII were net sellers for 1254 Cr today, while DII were Buyers for 375 Cr. A net selling of 879 Cr from the institutional side.

2. FII's created 1026 longs and created 69 shorts on the index futures

3. On the option front FII  created 61851 short calls and   created 18666 short puts. They also created 39915 long calls and  created 50842 long Puts.

4. For next week expiry, Nifty has the highest OI for PE at 16000 followed by 16200 and highest OI for CE is at 16500 followed by 16300. Highest Put writing was seen at 16200 and highest call writing was seen at 16500 levels.

5. For the next week expiry, Bank Nifty has the highest OI for PE at 34000 followed by 33000 and highest OI for CE is at 34500 followed by 35000. Highest Put writing was seen at 34200 and highest call writing was seen at 34500 levels. 

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

7. US markets trading in red as of now

8. The breadth of the market was weak today

9. Nifty opened at 16318 and made an intra day high of 16399 and a low of 16211 before closing at 16240 .The range of Nifty for the day was 188 points.

10. Bank Nifty opened at 34448 and made an intra day high of 34655 and a low of 34134 before closing at 34163 .The range of Bank Nifty for the day was 521 points.

11. US Dollar Index is at 103.623

12. FMCG and Pharma were the only sectors closed in green, all other sectors closed in red

13. India VIX eased to 22.2950

14. US 10Y yields are at 2.915

15. Nifty futures saw long unwinding

16. Bank Nifty futures saw long unwinding

17. US Brent oil eased to 109.66

18. USD / INR increased to 77.731


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