Hope traders made some profits today too on short side. Today's candle on daily chart gives clear picture of what the situation is and what we should expect in days to come if no substantially good news comes from goverment. But this I will explain when we tackle charts. First the essential fundamentals and review of today's market. That Nifty will fall And I would look to short is what I wrote yesterday too and I also wrote that there is buying area from 10925 to 10900 and I was hopeful that buying will start there. So I booked profits on shorts the moment Nifty touched 10930 but did not initiate any buy trade even though Nifty went into buying area. Why? So here is a trading tip which I normally observe- During expiry days (Wednesdays & thursdays) especially, market generally gives 2 big moves but the condition is that first move should complete by around noon. And then second move may start somewhere after 1/1.30 pm so that by closing hours it has covered good ground. Today the fall continued systematically way beyond noon and Nifty touched Buying area at around 2.30. So then there was no time for reversal. Now the obvious question therefore is, will it happen tomorrow? Shall we buy Nifty at these levels. My answer is emphatic NO. As the day changes, entire set of parameters change and hence we will look at it afresh now.
1) FII & DII data- As per provisional figures, FIIs were Net Sellers by 771 Crs and DIIs were Net Buyers by 354 Crs. The final data shows that FIIs were net Sellers in Equity by 408 Crs ( here, they bought in secondary market worth 256 Crs and sold on primary and other markets by 664 Crs), net buyers in index future by 504 Crs and again net sellers in stock futures by 562 Crs. The view is clearly what I held yesterday- FIIs want to sell but they are not finding stocks worth selling but they do not want to start buying as yet. So again as per this data, keep Selling.
2) Option chain data - On PUT side, there is unwinding on all strikes on and above 10850. The highest unwinding (7.52 lakhs) is at 11000 strike followed by 10950 (3.54 lakhs). On 10900 strike which I was looking as support, there is unwinding of 2.69 lakh contracts but it still has highest total OI (13.18 lakhs) . So where is the confidence of put writers ? Frankly speaking nowhere because highest put writing of meagre 1.58 lakhs is at 10800 strike and that is why I said I will not buy at 10900 now. On CALL side, there is impressive Call writing and total OI on all strikes starting from 10950. Highest total OI ( 30.98 lakhs) is at 11100 but highest fresh Call writing (13.63 lakhs) is at 11000 strike which has 2nd highest total OI at 25.52 lakhs. Lower strike of 10950 has total OI of 12.40 lakhs and Call writing of 10.70 lakhs. Impressive again! So for me even 10950 is good resistance for such a market. Thus as per OC data, range has open lower end and upper cap is at 10950/11000.
3) Charts- Todays Red candle on daily charts has good body and has fell slowly (if you watch on 5 min chart) thereby testing highs and falling even further. It has broken lows made earlier on 14th & 16th August and is near the low touched on 13th August. On any time frame-60, 15 or 5 I could not find any good, credible and trustworthy support. If we break this buying area and go below 10885 and if Nifty stays there (i.e. below 10885) for an hour or so, the weakness will deepen. The weekly demand zone starts at 10863 and there we might find some support. There is a weak buying area between 10817 and 10788 but frankly I have no confidence until and unless some fundamentals improve.
Shorting levels are mentioned on charts. Since tomorrow is expiry, nifty might surprise if some fund wants to buy, so trade with strict SL.
All the best, happy trading.
1) FII & DII data- As per provisional figures, FIIs were Net Sellers by 771 Crs and DIIs were Net Buyers by 354 Crs. The final data shows that FIIs were net Sellers in Equity by 408 Crs ( here, they bought in secondary market worth 256 Crs and sold on primary and other markets by 664 Crs), net buyers in index future by 504 Crs and again net sellers in stock futures by 562 Crs. The view is clearly what I held yesterday- FIIs want to sell but they are not finding stocks worth selling but they do not want to start buying as yet. So again as per this data, keep Selling.
2) Option chain data - On PUT side, there is unwinding on all strikes on and above 10850. The highest unwinding (7.52 lakhs) is at 11000 strike followed by 10950 (3.54 lakhs). On 10900 strike which I was looking as support, there is unwinding of 2.69 lakh contracts but it still has highest total OI (13.18 lakhs) . So where is the confidence of put writers ? Frankly speaking nowhere because highest put writing of meagre 1.58 lakhs is at 10800 strike and that is why I said I will not buy at 10900 now. On CALL side, there is impressive Call writing and total OI on all strikes starting from 10950. Highest total OI ( 30.98 lakhs) is at 11100 but highest fresh Call writing (13.63 lakhs) is at 11000 strike which has 2nd highest total OI at 25.52 lakhs. Lower strike of 10950 has total OI of 12.40 lakhs and Call writing of 10.70 lakhs. Impressive again! So for me even 10950 is good resistance for such a market. Thus as per OC data, range has open lower end and upper cap is at 10950/11000.
3) Charts- Todays Red candle on daily charts has good body and has fell slowly (if you watch on 5 min chart) thereby testing highs and falling even further. It has broken lows made earlier on 14th & 16th August and is near the low touched on 13th August. On any time frame-60, 15 or 5 I could not find any good, credible and trustworthy support. If we break this buying area and go below 10885 and if Nifty stays there (i.e. below 10885) for an hour or so, the weakness will deepen. The weekly demand zone starts at 10863 and there we might find some support. There is a weak buying area between 10817 and 10788 but frankly I have no confidence until and unless some fundamentals improve.
Shorting levels are mentioned on charts. Since tomorrow is expiry, nifty might surprise if some fund wants to buy, so trade with strict SL.
All the best, happy trading.