30th Aug' 2022 (Evening)

30th Aug' 2022 (Evening)  --  |  Written at 8.15 PM on 31st Aug' 2022  |

  • After the anxiety on Monday, Globally the sentiment was a bit more confident and that boosted the morale of Indian Investors. Buying was seen across the board and the Indices made stellar gains in a single trading day.
  • #Nifty gained 446 points to close at 17759 and #BankNifty gained 1260 points to close at 39536. With this both #Nifty and #BankNifty closed above the highs of Thu (monthly closing). This may be seen as a sign of strength.
  • However, lets look at the levels first and then we will discuss further
  • If we look closely at the levels we find the first support levels are now a bit far from the spot price on both #Nifty and #BankNifty. This is due to heavy buying seen on Tuesday.
  • The first levels are now close and the markets have seen a sharp rise on Tue. I would expect the Indices to consolidate at the current level now. With some short term traders taking some profits out, Both #Nifty and #BankNifty may see some change of hands at the current levels. Between the first resistance and first support levels, I would be happy if I get some dips and am able to get closer to the first support.
  • If the charts are observed very closely, one would also see that the strong base of the market has moved up. Now looking at individual risk reward, one can choose the entry points. Beware that the supports if breached, would invalidate this base case.
  • The #FII bought heavily in the cash market yesterday and also took an extremely bullish stance on the Futures and options side. They created 8000 longs in Index futures and unwound 11000 shorts. They also created 16000 longs on stock futures and unwound 5000 shorts, also writing puts on Index options and unwound calls on Index options.
  • I would be hopeful of further movements of the Indices and would expect them to hit the recent highs. There however will be strong resistance at 18000 on #Nifty and 39800 on #BankNifty. Last attempt to breach these resistance levels failed. let us see the action this time. However, this comes later, lets observe the immediate action first.
  • Doller Index is again at 108.75 and the oil prices have eased to 96. The 10 year US yields are also stable at 3.1. So nothing great happening there. INR has strengthened slightly against USD.
  • The IT stocks continue to underperform and Banking, Auto seem to be strong. FMCG was anyways running strong. For a strong and sustainable move on #Nifty we need #Reliance and #NiftyIT to participate in the rally. While #Reliance has shown some symptoms of strength, #NiftyIT is still slogging.
  • The GDP data being released for India is probably indicative of a strong India, though the outcome may be below expectations. This may move the market tomorrow. Lets see how much of this was priced in on Tuesday.
  • I mentioned earlier in my notes that Volatility will continue, so expect the markets to be volatile on either side.
  •  Growth of non farm jobs in US seems to have slowed down compared to Jun and July, however in headline, we still see growth and this is a concern as per #FED. Euro CPI data released also shows that the #Inflation is still a concern. Chinese #PMI data is also strong. So, i feel some more work for #FED.

1. FII were net buyers for 4165 Cr today, while DII were sellers for 656 Cr. A net buying of 3509 Cr from the institutional side.

2. FII's created 8094 longs and unwound 11306 shorts on the index futures

3. On the option front FII  unwound 27371 short calls and   created 38157 short puts. They also bought 13526 long calls and  bought 92083 long Puts.

4. For next week expiry, Nifty has the highest OI for PE at 17300 followed by 17500 and highest OI for CE is at 18000 followed by 17700. Highest Put writing was seen at 17500 and highest call writing was seen at 17850-17950 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 41000 followed by 40500. Highest Put writing was seen at 39000 and highest call writing was seen at 39700-41000 levels. 

6. Asian markets closed mostly in green on Tuesday and are trading mixed today. Europe closed mixed yesterday and trading in red today

7. US markets closed in red yesterday and are trading flat to red today

8. The breadth of the market was extremely positive yesterday

9. Nifty opened at 17414 and made an intra day high of 17777 and a low of 17401 before closing at 17759 .The range of Nifty for the day was 376 points.

10. Bank Nifty opened at 38516 and made an intra day high of 39606 and a low of 38472 before closing at 39536 .The range of Bank Nifty for the day was 1134 points.

11. US Dollar Index is at 108.775

12. All sectors closed in green yesterday

13. India VIX is at  18.700

14. US 10Y yields are at 3.118

15. Nifty futures saw long buildup

16. Bank Nifty futures saw long buildup

17. US Brent oil is at 96.61

18. USD / INR is at 79.463


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