27th May' 2022 (Evening)

27th May' 2022 (Evening)  --  |  Written on 29th May' 2022 at 6.15pm  |

  • Indian indices #Nifty and #BankNifty after opening gap up on Friday, started sliding, however the dip was bought and the Indices gave a breakout from the day highs and closed near the day highs.
  • The daily chart show a candle with a long lower tail indicating buying at lower levels. The buying at lower levels shot up the indices and triggered a sharp short covering on both #Nifty and #BankNifty, with a loss of 20% and 16% in the open Interest.
  • Let us look at the levels :
  • Both #Nifty and #BankNifty closed at day highs and close to their resistance levels. I see #Nifty facing resistance at 16400 and #BankNifty at 36300. Just in case if these are taken down, next levels to watch for are 16750 and 36800 for #Nifty and #BankNifty respectively.
  • The options #OpenInterest shows a tussle between bulls and bears at 16300 for #Nifty. This level has to be closely watched. A wider trading range of 16000-16500 still is relevant. On #BankNifty this range of from 35000 to 36500.
  • #FII on Friday sold for 1943Cr in cash. They however, were positive on the FnO side. They created 4770 longs against unwinding of 5593 shorts on Index futures.
  • On the options side the #FII wrote a large number of #puts against a small number of #calls on index, indicating a positive stance. I believe this is a result of short covering triggered by #DII buying. This needs a confirmation though.
  • Globally the European Markets closed strong on Friday and both #DowJones and #Nasdaq closing strong. The sentiment may have to wait for a follow through confirmation as the US markets are closed on Monday.
  • I had mentioned following as support levels earlier. #DowJones - 29800, #Nasdaq - 11000 and #SandP at 3700. #DowJones bottomed at 30635, #Nasdaq at 11035 and #SandP at 3810. We have to watch how long the pullback lasts.
  • The next level to be watched for some sustenance is as follows : #DowJones - 34100, #Nasdaq - 12925 and #SandP - 4300. We may see the current pullback till these levels. 
  • #DollarIndex at 101.6 is a relief and supports the up move. However the markets are still news driven, so do not let the guards loose. I would watch for it to fall below 99.8 for a sustenance. Contra traders can take a call now, however have to keep the positions size in control.
  • The US 10 Y Yields are at 2.74 and seem to have been priced in at this level. However the oil is back above 115 USD. Need to watch this.
  • Important global events next week are : Mon - US markets off Tue - Chinese #PMI, European #CPI and US consumer confidence Index Wed - German and British mfg #PMI US farms data and mfg #PMI. Thu - US jobs data Fri - Chinese holiday and US non mfg #PMI
  • Wish you a happy trading week ahead.....

1. FII were net sellers for 1943 Cr today, while DII were Buyers for 2727 Cr. A net buying of 784 Cr from the institutional side.

2. FII's created 4770 longs and unwound 5593 shorts on the index futures

3. On the option front FII  created 42031 short calls and   created 107227 short puts. They also bought 83516 long calls and  bought 131630 long Puts.

4. For next week expiry, Nifty has the highest OI for PE at 16300 followed by 16000 and highest OI for CE is at 16300 followed by 16500. Highest Put writing was seen at 16300 and highest call writing was seen at 16300 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 36000 followed by 36500. Highest Put writing was seen at 35500 and highest call writing was seen at 35600 levels. 

6. Asian markets closed in green on Friday and Europe also closed in green

7. US markets closed in green on Friday

8. The breadth of the market was extremely strong today

9. Nifty opened at 16296 and made an intra day high of 16370 and a low of 16221 before closing at 16352 .The range of Nifty for the day was 149 points.

10. Bank Nifty opened at 35326 and made an intra day high of 35694 and a low of 35291 before closing at 35613 .The range of Bank Nifty for the day was 403 points.

11. US Dollar Index is at 101.653

12. Led by IT, BankNifty and Auto, except Energy and Metals all sectors closed in green

13. India VIX eased to 21.480

14. US 10Y yields are at 2.743

15. Nifty futures saw short covering

16. Bank Nifty futures saw short covering

17. US Brent oil increased to 115.32

18. USD / INR increased to 77.692


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