NIFTY for 2nd January

NSE:NIFTY   Nifty 50 Index
Frankly speaking, it rarely happens that levels I prescribe for Nifty and Banknifty (BNF), both get honoured. Today was one such day, so hope few traders did earn something. Though the trading range was narrow and volumes low due to 1st January taken off by many, 50 point profit in Nifty and 200 point profit in BNF was achieved. Now what about tomorrow? Please check my video posted on youtube under channel name Market Movers India for slightly more analytical content. Today markets opened on the back of 2 news- core sector output shrinks by 1.5% (meaning negative 1.5%) and Fiscal deficit at 115% of annual target (meaning what deficit we should have incurred by 31st March, 2020- was reached by end of November), according to CAG report. Today being 1st Jan, auto sales figures were expected and people in the know, knew that it won’t be good. All this prepared for today’s fall. However, due to limited activity and low volumes, fall was muted. A look at FII and DII figures today show this. However, final FII figures for 31st December show that FIIs were net buyers by 1955 Crs in Equity but Net sellers in index futures by 693 Crs and in stock futures by 1271 Crs (big figures both considering year-end holiday season is underway). This shows that FIIs are buying selectively in cash.
Option chain figures show that there is good resistance at 12200 & 12250, both strikes, and support divided between 12100 and 12150. Daily Chart shows that Nifty today made a red candle but with lower high and higher low. Maybe again, due to low volumes today. But tomorrow being expiry, wild movements will happen and either of the yesterday’s limits (High-12247 and Low-12151) are very likely to be broken. Nifty’s 20 DEMA is at 12131, so buying can emerge from that level and selling is expected if Nifty reaches 12200. Another selling area is also marked on 15 min chart if Nifty rises till around 12230. So one can trade on both sides.
All the best. Happy trading.

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