AVENUESOFINVESTMENT

BANK NIFTY heavyweights drag NIFTY in to a Red Close

Long
NSE:BANKNIFTY   NIFTY BANK
NIFTY 50 EOD ANALYSIS -22-09-21

IN SUMMARY
O / H / L / C
17580.9 / 17610.45 / 17524 / 17546.65
H-L = 86 points
VIX 16.49 / -0.18%
FII DII: Not available till 1845h. May be flat to negative.
SGX NIFTY at 1830h - 17587 +33points
Likely open: Flat to mild positive.

CHART BASED CONCLUSIONS - 15 M Chart


A mild gap-up open was immediately sold in to and then around 17530, buying stated and then the index was on a choppy ride for rest of the day.

It was a very narrow range day - 86 points only.

Late sell-off in BANK NIFTY dragged the index below P Close and ended the day just below 17550.

NIFTY WEIGHT LIFTERS & DRAGGERS

The Weight Lifters

RELIANCE 20
TECH MAHINDRA 10
TATA MOTORS 08
JSW STEEL 07
HINDALCO 05
TOTAL 50

The Draggers

HDFC BANK 24
HDFC 22
ICICI BANK 18
NESTLE 08
KOTAK BANK 08
TOTAL 80

Lifter - Draggers = -30

POSITIVES
RELIANCE and MARUTI also helped NIFTY . Despite NIFTY being choppy, RELIANCE was level-headed and that saved the day for NIFTY .

17500 levels were held on for the day despite severe selling in the banks.

NIFTY made a higher high and a higher low.


NEGATIVES

BANK NIFTY easily gave up 37000 on a closing basis.

Private banks were under severe pressure.

HDFC is under serious selling pressure as every rise is sold in to.


TRADING RANGE FOR 23-09-21

17300-17350 is now restored as the support line. Resistances at 17600-30-700.

BANK NIFTY supports lines were breached so now the support line is redrawn as 36200-500. Resistances at 37000-200-500.


INSIGHTS / OBSERVATIONS

HDFC BANK seems to have become the punching bag today as well. I now feel that the scrip would go up only late on Friday or next week. Tomorrow is the last day for Option Buyers to exit trades in Stock Options without attracting additional margins. This is what I have been observing for some time now - I myself being one such trader.

NIFTY 17500 CE is now priced in line with the underlying. Usually, this should happen closer to the EOD on the weekly expiry day.

The range for NIFTY was quite narrow and if someone was able to make even modest gains in CE / PE long, the person is quite good at picking the levels.

BANK NIFTY and HDFC BANK charts look more or less similar on 5 minutes chart. I was trading both so I know. It was interesting to see how a scrip can move the index on its own weight.

After 1515h, I could see that there was some adjustment in the Option prices of 37100 CE as even though BANK NIFTY went down and then recovered , the corresponding premium appreciated instead of going down.

Most interestingly, even though the European markets are good green, our markets ended in the red. So will the indices play a catch-up game tomorrow?


What do you feel about this?

Thank you, and Happy Money Making!

Umesh
22-09-21

NOTE --

This write-up is not a prediction mechanism for the movement of Indices in the Indian markets as the markets are unpredictable in nature. I may refer to many data points in the article but I do not base my view on any of these standalone. In fact, I prefer to react to the price moves than predict the price moves. I also do not review Open Interest. Whatever data points I am using, are all stated in the article. The article title, as well as its contents, can at best be stated as --- This Is How I Read Nifty . I hope I have been able to set the expectations right.


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