Nifty and BankNifty (BNF) both are at crossroads. People who were reading my posts regularly would remember that I had given a short call since Monday after budget consistently. But now, it seems one should pause. Why? after such a huge fall, is there not not a breakdown in Nifty and BNF? Let me state my case fact by fact:
1) Provisional figures show FIIs were Net Sellers by around 645 Crs and DIIs were net Buyers by around 1080 Crs. Final figures show that FIIs/FPIs were Net Sellers in Equity by 328 Crs and in Index futures by 1638 Crs (See, why there was such massive fall!) and Net Buyers in Stock futures by 190.63 Crs. So FII strategy still seems same- Buy value picks and short indices. The volume of Sale today in BNF futures was highest since 7th June (and this also explains why today BNF was much weaker than NIFTY) but not so in Nifty futures, thankfully. So according to this data point, there is still no change and FIIs will gun for Sale at highs, make no mistake.
2) Option chain data- Here is something that is surprising me. Nifty closed today at 11085, down by 103 points, broke previous low made more than 2 months ago, but... There is good fresh PUT addition on strikes 11100, 11050 & 11000. Each has added more than 5 lakh contracts today. total OI on 11100 is 16.20 lakh and on 11000 is 17.05 lakh contracts. Agreed, there is unwinding on all strikes above 11050, but what is impressing me is that PUt writers seem to have no fear about 11000 to 11100 range. On Call side, there is massive fresh CALL writing (more than 11.5 lakhs each)and massive total OI (more than 12 lakhs each) on all strikes starting with 11100 till 11300. so still Call writers are in huge numbers than PUT writers but one has to understand that these are near expiry days and situation can quickly chnge as fas as option chain is considered near expiry.
3) On charts, Nifty is looking bad. Big red candle, bigger than all candles in last 6-7 days, created fresh low and MACD still showing divergence with deep red bars. But Nifty RSI now is at 26.63, oversold area. So is BNF too- 29.73, oversold area. Nifty can go low further but it will be very slow and till 11000. BNF closed today at 28791 and it has multiple supports in the range of 28788 to 28525. So it is possible that BNF can fuel some reversal from here. But again, it is not going to happen soon. My reading is that now Nifty will spend a lot of time here between 11000 and 11100 and BNF will stay between above said range till we get any good fundamental trigger. If we get any bad strong trigger then we can start falling further. Therefore there are no clearcut nearby levels of short for Nifty and BNF. If people want, let me know, I might post during trading hours.
1) Provisional figures show FIIs were Net Sellers by around 645 Crs and DIIs were net Buyers by around 1080 Crs. Final figures show that FIIs/FPIs were Net Sellers in Equity by 328 Crs and in Index futures by 1638 Crs (See, why there was such massive fall!) and Net Buyers in Stock futures by 190.63 Crs. So FII strategy still seems same- Buy value picks and short indices. The volume of Sale today in BNF futures was highest since 7th June (and this also explains why today BNF was much weaker than NIFTY) but not so in Nifty futures, thankfully. So according to this data point, there is still no change and FIIs will gun for Sale at highs, make no mistake.
2) Option chain data- Here is something that is surprising me. Nifty closed today at 11085, down by 103 points, broke previous low made more than 2 months ago, but... There is good fresh PUT addition on strikes 11100, 11050 & 11000. Each has added more than 5 lakh contracts today. total OI on 11100 is 16.20 lakh and on 11000 is 17.05 lakh contracts. Agreed, there is unwinding on all strikes above 11050, but what is impressing me is that PUt writers seem to have no fear about 11000 to 11100 range. On Call side, there is massive fresh CALL writing (more than 11.5 lakhs each)and massive total OI (more than 12 lakhs each) on all strikes starting with 11100 till 11300. so still Call writers are in huge numbers than PUT writers but one has to understand that these are near expiry days and situation can quickly chnge as fas as option chain is considered near expiry.
3) On charts, Nifty is looking bad. Big red candle, bigger than all candles in last 6-7 days, created fresh low and MACD still showing divergence with deep red bars. But Nifty RSI now is at 26.63, oversold area. So is BNF too- 29.73, oversold area. Nifty can go low further but it will be very slow and till 11000. BNF closed today at 28791 and it has multiple supports in the range of 28788 to 28525. So it is possible that BNF can fuel some reversal from here. But again, it is not going to happen soon. My reading is that now Nifty will spend a lot of time here between 11000 and 11100 and BNF will stay between above said range till we get any good fundamental trigger. If we get any bad strong trigger then we can start falling further. Therefore there are no clearcut nearby levels of short for Nifty and BNF. If people want, let me know, I might post during trading hours.