Short Market Report 24.01.22

Short Market Report

The bloodbath seen today has been caused by global cues coupled with the possibility of war by Russia. Though FIIs sold only 3700cr but I cannot rule out if this was not a targeted selling. I can say with absolute assurance that something is going on between FIIs and Indian Government. We may get some clue during the budget, but that would be a far fetched assumption. Given these facts, let us limit ourselves on the technical side.

Nifty has taken support near 61.8% fib retracement which comes around 17154. Bank nifty was more resilient as expected. Without this support we would have gone down by 4%. Bank nifty took support at around 50% retracement and closed around 38.2% region.

Every analysis suggests that we have not bottomed out. That is the bad news. So there is no point in finding supports. we will have reversal when we have reversal. As of writing this, all important US indices are down by 3-4% and trading in deep red. Expect that tomorrow. India vix is also pointing towards similar outcome.

Selling was so severe that Put-Call ratio was hitting almost 1.9 at one point which was an extreme bearish sign. As of EOD data, it is still 1.5 in both indices which indicate severe bearishness moving forward.

Trading Ideas: Avoid buying options as any change in Vix will lead to huge changes in option premiums... mostly on the down side. Better sell calls using strategies. 36900 CE and 17150 CE may be a good idea for sell but have patience before you enter

Nifty & Bank Nifty

Conviction & Bias Bearish