It is going to be a critical trading day tomorrow. After Moody's rating downgrade already out before our market opening hours in morning, we openned slightly gap down (25 points down) but climbed up soon (thinking that moody's downgrade was misplaced) and then broke Thursday's high briefly, before starting to come down. And it did come down massively. Later came the news that it could have been because of Nomura's report with similar concerns but much poor outlook. Nomura's report pegged India's GDP growth at 4.9%, till date most pessimistic figure of all the figures. On daily chart, Nifty formed an exact evening star pattern which is bearish reversing indicator. But more about it when talk about charts. Let's check our usual data.
1) FII & DII data: Like on 7 previous trading days, FIIs were net Buyers by 932 Crs whereas DIIs were net Sellers by 584 Crs. By figures, FIIs bought a lot but DIIs volume of sale , probably in Nifty stocks was much higher, resulting in 103 point fall in Nifty over previous day's close. With such scary reports, it seems FIIs (at least few of the lot) might rethink their strategy and start selling. But as we have seen in past, DIIs might turn buyers then and therefore I have said in the beginning, it is going to be a critical day tomorrow.
2) Option chain data: On PUT side, we see unwinding on 11900,11950 & 12000 strikes even though total OI at 11900 (12.69 lakhs) is quite near the highest figure seen at 11700 (12.82 lakhs). Observe that highest total OI is now on 11700- Put writers have lost confidence on 11900 and on 11800 also, which is surprising just in one session. On CALL side, we can see confidence of Call writers - highest total OI ( 26 lakhs) and highest fresh Call writing (12 lakhs) both are at 12000. Scaling past 12000 will be tough task in this truncated week.
3) Charts: Nifty finished a strong red candle with much lower high and lower low. It also created evening star pattern which is taken as a reliable bearish reversal pattern. People may say that high made on Friday was higher than thursday's high. But in evening star patterns, gap-down openning and then closing further down is much more important. On Thursday, RSI showed 72.53, which is in overbought region. On friday after fall RSI is now at 64.6. So I have marked selling and buying areas on 15 min chart. Actually, we have a weak selling area and strong buying area, but in current bearish scenario, I am more confident about selling Nifty than buying. But this is my view and traders may please use their own discretion. In such case, strictly use stop loss and secondly, use spread strategies so as to protect us from unnatural opposite swing.
All the best. Happy trading.
1) FII & DII data: Like on 7 previous trading days, FIIs were net Buyers by 932 Crs whereas DIIs were net Sellers by 584 Crs. By figures, FIIs bought a lot but DIIs volume of sale , probably in Nifty stocks was much higher, resulting in 103 point fall in Nifty over previous day's close. With such scary reports, it seems FIIs (at least few of the lot) might rethink their strategy and start selling. But as we have seen in past, DIIs might turn buyers then and therefore I have said in the beginning, it is going to be a critical day tomorrow.
2) Option chain data: On PUT side, we see unwinding on 11900,11950 & 12000 strikes even though total OI at 11900 (12.69 lakhs) is quite near the highest figure seen at 11700 (12.82 lakhs). Observe that highest total OI is now on 11700- Put writers have lost confidence on 11900 and on 11800 also, which is surprising just in one session. On CALL side, we can see confidence of Call writers - highest total OI ( 26 lakhs) and highest fresh Call writing (12 lakhs) both are at 12000. Scaling past 12000 will be tough task in this truncated week.
3) Charts: Nifty finished a strong red candle with much lower high and lower low. It also created evening star pattern which is taken as a reliable bearish reversal pattern. People may say that high made on Friday was higher than thursday's high. But in evening star patterns, gap-down openning and then closing further down is much more important. On Thursday, RSI showed 72.53, which is in overbought region. On friday after fall RSI is now at 64.6. So I have marked selling and buying areas on 15 min chart. Actually, we have a weak selling area and strong buying area, but in current bearish scenario, I am more confident about selling Nifty than buying. But this is my view and traders may please use their own discretion. In such case, strictly use stop loss and secondly, use spread strategies so as to protect us from unnatural opposite swing.
All the best. Happy trading.