Market Report 5th Aug'2021 (Evening)

NSE:NIFTY   Nifty 50 Index
After the stellar move over the last two days, Nifty took a breather today. Nifty made a small bearish Doji kind of a candle on a daily chart . Indicating some uncertainty.
After touching 16380 intraday, it closed at a new all time high of 16294. Important is to see, which side is protected tomorrow, todays low of 16210 or todays high of 16380.
Generally speaking a breach on the higher side may elevate the inde to 16400-16500 level while a breach on the lower side, may make it test 16200 again.
Bank Nifty
After the two day move, Bank Nifty lacked strength today. After opening slightly higher, it lacked strength and started sliding. While it did pick up some support at 35661, making a 200 point recovery, it made a bearish candle on a daily chart , closing at 35834.
Bank Nifty seems to be weaker than Nifty and there are good reasons for it to be like this.
FII again sold for 700Cr today and DII bought the same. Both are again in their respective stance that they were following for some time.
On the FnO side, FII unwound a small number of longs and created some shorts. on the options side, the Index data was not relevant today (being expiry), on the stock options side , their stance was mildly bearish as well.
Global markets were mixed today, though US as of now is trading in a positive zone.
Options data for the next week is indicating a support for Nifty at the current levels, while BankNifty has support at 35000 and resistance at 36000, creating a zone of around 1000 points.
Nifty Support
Nifty first support 16200.
Nifty Second support at 16000
Bank Nifty First support at 35600
BankNifty second support at 35200
Nifty Resistance at 16380
BankNifty resistance at 36100
Nifty weak only below 15900 and BankNifty below 34800. Keep these levels in mind when taking a position as per the risk reward and risk carrying capacity.
Keep leverage in control, when taking any positions at the current level. I have sold straddle of 35500 and 16300 on Nifty and Bank Nifty respectively and collected a decent premium. However, the position size is such that it can be covered in cash on any side.
The US yields and Dollar Index is in a reasonable range.
Initial jobless claims in US have come out to be slightly more than expected, though market has brushed this apart.
Our markets would be keeping an eye on the RBI meeting and its outcome tomorrow. Any substantial changes to rates is not expected, important would be to watch the commentary from the BBI Governor.
When Nifty is at all time high, The broader market is underperforming. So this may be an important cue. The last leg of this rally was actually driven by a few stocks.


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