protrader1969

NIFTY for 6th December

NSE:NIFTY   Nifty 50 Index
The market had expected and already factored in a 25 basis point rate cut in repo rate from today’s monetary policy . However, when that did not happen, markets fell- now that’s what experts believe! But when you see today’s charts, if this were true, then how come Nifty after fall, climbed up almost to pre-policy announcement levels ( nifty at 11.30- 12070 and Nifty at 13:45 -12073!) and then fell as if, to prove a point. In my opinion, here onwards inflationary pressures, weak economic outlook and even more alarming signals (now from RBI) on consumption front will not let markets move up. In my video posted on youtube under channel name Market Movers India, I have talked about this in greater detail so please check and subscribe that. Markets may stay here or go down till the clouds are clear. Let’s validate this point using our regular data-
1) FII & DII data: For a change, FIIs were net buyers today and DIIs were net Sellers. Figures for both these entities are not so high to give us any conclusion about their outlook. So let’s leave it at that. In final data for yesterday, FIIs were Net sellers in Equity and index futures but net buyers in stock futures . FIIs will not shy away from Selling if they find valuations high.
2) Option Chain data: (Expiry 12th December) On PUT side, highest total OI is on both strikes 11900 and 12000 (almost equal figures) suggesting that half of put writers believe that 12000 can be breached and then 11900 may act as support. Highest Put writing is at 12000 and 2nd highest at 11900. So this data also supports the said view. On CALL side, 12100 is a clear cut resistance with highest total OI and highest fresh Call writing by huge margin over other strikes. Tomorrow it is almost impossible for Nifty to reach 12100.
3) Charts: Daily chart for Nifty gives you a very clear picture of how things may pan out in next few days. Nifty after 3 days of strong red candles previously, made a strong green candle today and on the back of that, opened gap-up but could not sustain it and fell down at 12000. Then, it climbed a bit to close at 12018. In today’s session, Nifty tried to go below 12000 thrice (check on 5 min chart) and each time recovered . Tomorrow, I think it may succeed! There is a strong buying area marked on 15 min chart and also a selling area if Nifty reaches there. Buy or Sell with a SL beyond red line. Chances of fall or consolidation in a narrow range are more.
All the best. Happy trading.

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