NIFTY for 9th March

NSE:NIFTY   Nifty 50 Index
All the indices of the world ended in red on Friday. Dow & Nasdaq, closed later in red but recovered almost 1% from their lows because of Joe Biden's victory in primaries-meaning that recovery had nothing to do with corona virus scare. Now the stage is such that nobody in the world has the faintest clue about what financial impact this outbreak is going to leave. Looking at it macroscopically, China is stabalising with no new cases reported from outside Hubei province, the epicentre. South Korea and Iran are battling new cases and new deaths. Italy is slightly better off with no new deaths reported in last 24 hours. As for India, 5 new cases were identified with total cases at 44, but thankfully no deaths yet. The scare is still real. Please watch the video posted by me under channel name market movers India on youtube for more in-depth analysis. On friday, as per provisional figures, FIIs were net sellers by 3595 Crs and DIIs were net buyers by 2544 Crs. So FIIs are still in no mood to commit funds for long term till the time they see some clarity which in turn means they can still easily go for even further selling. Option chain data shows that on PUT side, total OI above 9 lakh but below 10 lakh contracts is seen on 4 different strikes (10500, 10800,10900 & 11000), which is not great. Highest Put writing is at 10900 (7.26 Lakhs-which is decent). This means Put writers/traders do not have confidence in any one level which can act as solid support. So Nifty can fall further if option chain is to be believed. On CALL side, 11000 strike has highest Call writing and 5th highest total OI-which means 11000- just 11 points above CMP- is also a strong resistance. On daily chart, however, there is some positive data- Friday's candle is a hammer shaped green candle with long lower tail signifying recovery from lows and close above opening price. Friday's candle is at the lower edge of Bollinger band which normally is considered as oversold. RSI is at 26.08 which is in oversold region. So if you look at charts only, you may like to buy Nifty. But fundamental concerns and options' data does not give you that confidence. So one can buy and sell with strict STOP LOSS at levels marked on 15 min chart. A lot will depend on how Asian markets open tomorrow.
All the best. Happy trading.

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