Last night, after writing post here I started reading other write ups, posts, news items, saw videos about next day's market movement and majority seemed bullish. Business channels were broadcasting studies and surveys which expected expiry between 11100 to 11150. And I wondered, did I miss something? Am I not reading data correctly or Am I reading wrong data? Seriously! Because I was not getting any bullish signal from anywhere except that on expiry day we do see trade reversals in second half but that is freak and fluke. For the same reason I sarted yesterday's post with sentence ' Confidence is shaken' and advocated shorts. Now look what happenned today, Nifty expired at 10,948. Today's nifty movement will tell you a lot about current market situation if you analyse it thorougly. I will take it up when I discuss charts. First things first.
1) FII & DII data: Provisional data show that FIIs were Net Sellers by 987 Crs and DIIs were Net Buyers by 489 Crs. The usual set-up! Final data from NSDL show that FIIs were Net Sellers in Equity by 1081 Crs, in index futures by 1420 Crs, and in stock futures by 287 Crs. Selling in all segments on expiry day. It would do us well if we remember that for last few days, FIIs were Net buyers in index and stock futures. It seems they settled it all today. This again point to the fact that I am writing since last three days- FIIs are not carrying trades for long periods! Again, confidence for long term investment is not there.
2) Option chain data: Expiry 5th Sepetember- Interestingly, there is some good buildup of OI on both sides for next week's expiry. ON PUT side total highest OI (12.75 lakhs) is at 11000 strike and fresh highest Put writing ( 3.58 lakhs) is at 10900 strike where we see 2nd highest total OI of 9.10 lakhs. On CALL side, total highest OI (15.27 lakhs) is at 11000 strike and fresh highest Call writing ( 11.18 lakhs) is at 11100 strike which has 2nd highest OI of 18.46 lakhs. Look at figures, OI and writing both are significantly higher on call side than on Put side. Obviously bearishness continues. Since the expiry period is long away, I would put resistance at 11100 and support at 10900 based on OC data.
3) Charts- Observe closely on 5 min chart what happenned today. Nifty openned gap down below 11000 due to weak global signals and tried going above 11000. The candle betwen 9:55 and 10:00 shows that it touched a high of 11020 but closed in red, below open at 11006. It could not sustain 11020 level even for few minutes. This gave me first confirmation that bearishness is still there.Thereafter it went steadily down to a low of 10922 and started coming up again. Note the timing- 12.40 pm. European markets were up and were in green, so that gave some confidence to bulls. With great difficulty, it again tried to go above 11020 but was again hammered down immediately to a low of 10927. Note the length of some red candles. That shows momentum of sell-off. So, even though the range of movement was very very limited -10922 to 11021, there was serious threat at top. On daily charts, Nifty finished as red candle with lower high & lower low. Please do not refer to Nifty futures chart for this because there it is showing green candle as a freak trade was entered at 10800 during openning ticks! That could mislead us. According to charts, due to fall in later half a selling area was creted which I have market. Rest all parameters remain same.
All the best for tomorrow. Happy trading.
1) FII & DII data: Provisional data show that FIIs were Net Sellers by 987 Crs and DIIs were Net Buyers by 489 Crs. The usual set-up! Final data from NSDL show that FIIs were Net Sellers in Equity by 1081 Crs, in index futures by 1420 Crs, and in stock futures by 287 Crs. Selling in all segments on expiry day. It would do us well if we remember that for last few days, FIIs were Net buyers in index and stock futures. It seems they settled it all today. This again point to the fact that I am writing since last three days- FIIs are not carrying trades for long periods! Again, confidence for long term investment is not there.
2) Option chain data: Expiry 5th Sepetember- Interestingly, there is some good buildup of OI on both sides for next week's expiry. ON PUT side total highest OI (12.75 lakhs) is at 11000 strike and fresh highest Put writing ( 3.58 lakhs) is at 10900 strike where we see 2nd highest total OI of 9.10 lakhs. On CALL side, total highest OI (15.27 lakhs) is at 11000 strike and fresh highest Call writing ( 11.18 lakhs) is at 11100 strike which has 2nd highest OI of 18.46 lakhs. Look at figures, OI and writing both are significantly higher on call side than on Put side. Obviously bearishness continues. Since the expiry period is long away, I would put resistance at 11100 and support at 10900 based on OC data.
3) Charts- Observe closely on 5 min chart what happenned today. Nifty openned gap down below 11000 due to weak global signals and tried going above 11000. The candle betwen 9:55 and 10:00 shows that it touched a high of 11020 but closed in red, below open at 11006. It could not sustain 11020 level even for few minutes. This gave me first confirmation that bearishness is still there.Thereafter it went steadily down to a low of 10922 and started coming up again. Note the timing- 12.40 pm. European markets were up and were in green, so that gave some confidence to bulls. With great difficulty, it again tried to go above 11020 but was again hammered down immediately to a low of 10927. Note the length of some red candles. That shows momentum of sell-off. So, even though the range of movement was very very limited -10922 to 11021, there was serious threat at top. On daily charts, Nifty finished as red candle with lower high & lower low. Please do not refer to Nifty futures chart for this because there it is showing green candle as a freak trade was entered at 10800 during openning ticks! That could mislead us. According to charts, due to fall in later half a selling area was creted which I have market. Rest all parameters remain same.
All the best for tomorrow. Happy trading.