26th Aug' 2022 (Evening)

26th Aug' 2022 (Evening)   --   |  Written on 28th Aug' 2022 at 1.30 PM  |

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  • After a fag end cool down on Thursday, Markets opened gap up on Friday. Made some gains from there, however got sold off and slipped to close at the Day lows. While #Nifty saw a continuous slide, #BankNifty saw some support at the lower end and traded in a range.
  • Both #Nifty and #BankNifty made inside candles on a daily chart. The change in behavior I observe is that after the follow up selling on Monday, for two days ie Tue and Wed, the markets saw a gap down opening and then buying coming in to support at these lows, with market closing at day highs. On Thu and Fri the Indices saw gap up opening and then selling coming in at some time to close at day lows. 
  • So a bit of change in the behavior and this is driven from the #FII changing their stance in the markets. However, as in the past, the #DII came to rescue and supported the markets.
  • Levels :
  • #FII on Thu closed a lot of their positions on Index Futures, carrying a very small number of positions in the Sep series. The net long position for #FII was 35% at the start of Sep series, compared to 57% longs at the start of Aug series. 
  • On Fri the #FII unwound a large number of shorts from the system, increasing their net long percentage to 39%. Now this presents an opportunity as well. The first seen on Friday, when the support at lower levels led to them unwinding shorts on Index futures.
  • While on the other hand, the FED on Friday made some statements leading to panic globally. Some strong statements on rate rise to contain Inflation, led to selling in US markets and the Indices fell almost 4% in the day. 
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  • #DowJones fell 1000point plus and #Nasdaq fell 500 points. The Asian markets had closed by then, so they will react on this tomorrow. Europe partially factored in the sell, however more may come in tomorrow.
  • This may actually lead to some reaction in our markets tomorrow. I expect our markets to open gap down and most probably below the first support levels above. The larger observation point is to see if the second supports are held or not. A breach of the second support may lead to a much larger move on the down side. So keep an eye on 17325 on #Nifty and 37950 on #BankNifty. 
  • The options OI may not be relevant for Monday, so not posting an analysis on it as of now.
  • #DollarIndex is above 108 again, however, in spite of the actions on Friday, it is yet to hit 109. The US yields also have not seen any sharp increase yet. So we will have to watch...
  • While I would wait and would strongly recommend so, to watch the levels after the opening action tomorrow, I am actually hopeful of the second support being held. Lets see....
  • In any case do expect volatility being high.
  • Lets look at the global events this week.
    • Mon - UK markets closed
    • Tue - US consumer confidence and jobs data
    • Wed - Indian markets closed due to Ganesh Chaturthi, Chinese Mfg PMI, German Employment data, Euro - CPI, US - non farm employment data, 
    • Thu - Chinese mfg PMI, German mfg PMI, British mfg PMI, US mfg PMI, jobless claims
    • Fri - US non farm payrolls, unemployment rate
  • Enjoy the ride ahead. Wish you a happy trading week....

1. FII were net Sellers for 51 Cr today, while DII were buyers for 453 Cr. A net buying of 402 Cr from the institutional side.

2. FII's unwound 566 longs and unwound 11522 shorts on the index futures

3. On the option front FII  created 90106 short calls and   created 67864 short puts. They also bought 110216 long calls and  bought 88540 long Puts.

4. For next week expiry, Nifty has the highest OI for PE at 17000 followed by 17500 and highest OI for CE is at 17700 followed by 18000. Highest Put writing was seen at 17000-17500 and highest call writing was seen at 18000 levels.

5. For the next week expiry, Bank Nifty has the highest OI for PE at 39000 followed by 38000 and highest OI for CE is at 39500 followed by 40000. Highest Put writing was seen at 38000-39000 and highest call writing was seen at 39300 levels. 

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

7. US markets closed extremely weak and in red

8. The breadth of the market was positive today

9. Nifty opened at 17619 and made an intra day high of 17685 and a low of 17519 before closing at 17558 .The range of Nifty for the day was 166 points.

10. Bank Nifty opened at 39129 and made an intra day high of 39337 and a low of 38846 before closing at 38987 .The range of Bank Nifty for the day was 491 points.

11. US Dollar Index is at 108.76

12. Metals, Energy and PSU Banks led the gains while IT, FMCG were cool today

13. India VIX is at  18.215

14. US 10Y yields are at 3.03

15. Nifty futures saw long buildup

16. Bank Nifty futures saw long buildup

17. US Brent oil is at 100.6

18. USD / INR is at 79.959


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