23rd September' 2022 (Evening)

23rd September' 2022 (Evening)   --   |  Written at 4.00 PM on 25th September' 2022  |

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• After a relatively resilient first day, the second day turned out to be weak with people reluctant to put in money. The global weakness took its toll on us and a sharp selling was seen on Friday. There was no opportunity to by at any of the time intervals. 
• Both #Nifty and #BankNifty made strong bearish candles on the daily chart. While #Nifty closed staring at the 29th August Low the recent gains made by #BankNifty gives some space to #BankNifty from that low.
• Levels as we see now :
• As seen on the levels table above, we are now staring at the Aug lows and these levels have to hold, to prevent a deeper correction from these levels. We have been resilient recently, but then tiding against the winds for sustained periods may not be easy.
• The US markets are now lower than the low they made on 13th Jun. This was the time when we made our low in Jun. If you have been reading my notes consistently, I mentioned a target of 29800 on #DowJones and a target of 11000 on #Nasdaq. These were hit and we coincided by our low of 15200 on #Nifty and 32300 on #BankNifty. 
• Since then we outperformed the global markets by rising very close to all time highs, when the mother markets were struggling. The flight of global money and a huge buying interest from the domestic investors elevated the Indices. 
• The large question that faces is is do we align ourselves with the global markets or we stabilize earlier than them. Seeing that US markets have closed lower than the earlier lows, we have to watch for a recovery there, else the correction will definitely deepen there. In our case if we align with them, a deeper correction is possible, else difficult to say, where do we stop. 
• The INR has already breached the all time low and were are now sharply above 81 to a Dollar. The IT sector may face headwinds due to the slow down in US and Europe. Domestics facing stocks and the Banking stocks may remain strong with a rising rate scenario, though they have to tackle the problem of lower credit off takes.  

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• Well these are fundamental thoughts, looking at all this only from a technical standpoint, please watch the levels above. Trade carefully and with strict stop losses. Sometimes leverages can be kept low and only cash investments make sense. I feel that buying the dips has always worked and deploying capital at a rate of 2% of ones capital for every 1% drop in the mother index from its ATH  (#Nifty) makes generic sense. One can consider this, till some stability arises.
• Dollar Index is at 112.8 ( reasonably close to 114 its near term high) and needs to ease reasonably for a cool off. The comments from #FED actually do not give this feeling. A sharp fall in Oil prices indicates serious concerns on growth and are the consequence of other factors. 
• A look at the options OI indicate a wider trading range. #Nifty sees support only at 16800 and #BankNifty sees support at 39500. These seem kind of logical as well. While the levels above indicate some support at the first support levels, i feel any reasonable support will only come at the strong base. Watch this coming in before sticking ones neck out.
• Global cues coming in tomorrow will be important as they would be watched by many across the world. Watch for #US futures opening tomorrow. a small support coming in US markets was seen towards the end. Will this resume on Monday should be seen.
• Though in all this ruckus, #Maruti is strong and #NiftyPharma is strong. The fall in these was very small compared to the larger selling seen. 
• Watch these events globally :
• Mon - German GDP and business climate Index. Also ECB president speech
• Tue - US Fed comments, Consumer confidence and home sales data
• Wed - Fed chair speech
• Thu - US GDP and jobless claims
• Fri - Chines mfg PMI, India MPC outcome and rate decision, British GDP and US core PCE Index.
• Last and important - monthly expiry for us.
• Wish you all a happy trading week ahead....

1. FII were net selling for 2899 Cr today, while DII were buyers for 299 Cr. A net selling of 2600 Cr from the institutional side.

2. FII's unwound 8156 longs and created 28162 shorts on the index futures

3. On the option front FII  created 119500 short calls and   created 49904 short puts. They also bought 138123 long calls and  bought 104509 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 18000 followed by 17600. Highest Put writing was seen at 16800 and highest call writing was seen at 17500 levels.

5. For the next week expiry, Bank Nifty has the highest OI for PE at 39500 followed by 39000 and highest OI for CE is at 41000 followed by 40500. Highest Put writing was seen at 39600 and highest call writing was seen at 40500 levels. 

6. Asian markets closed in red and Europe also closed in red

7. US markets closed in red on Friday

8. The breadth of the market was extremely weak today

9. Nifty opened at 17593 and made an intra day high of 17642 and a low of 17291 before closing at 17327 .The range of Nifty for the day was 351 points.

10. Bank Nifty opened at 40429 and made an intra day high of 40528 and a low of 39412 before closing at 39546 .The range of Bank Nifty for the day was 1116 points.

11. US Dollar Index is at 112.815

12. Led by banking, Media, Metals and Energy all sectors closed in red

13. India VIX is at  20.5925

14. US 10Y yields are at 3.687

15. Nifty futures saw short buildup

16. Bank Nifty futures saw short buildup

17. US Brent oil is at 86.65

18. USD / INR is at 81.249