Whatever I wrote yesterday, holds good even for tomorrow. I wrote to take a pause from incessant selling- that's what happenend, Nifty & Banknifty both ended in green. I wrote that Nifty will consolidate betwen 11000 & 11100, Nifty made a low of 10999.4 (& high of 11145) in Cash. I wrote that Banknifty (BNF) will stay between 28525 & 28788, it made a low of 28529.75 (& high of 28979). As far as highs were concerned, both indices exceeded my expectations. Now if you look in totality signals are mixed. After yesterday's move, it looked as if we are going into a free fall and after today's move it may look like we have made a bottom and are ready for reversal. Frankly, neither is true as per my reading. So lets investigate what can happen tomorrow:
1) Provisional figures show that FIIs were Net Sellers by 1497 Crs and DIIs were Net Buyers by 2479 Crs, today. Final figures show that FIIs/FPIs were Net Sellers in Equity by 658 Crs but Net Buyers in Index futures by 939 Crs (This fuelled the rally) and in Stock futures by 1199 Crs (this helped too). So FIIs too paused. Why? First, Nifty is at 2 month old support and you don't break supports in one go. so buying did emerge in Nifty & BNF at crucial supports of 11000 & 28525 levels; Second, RSI of both Nifty & BNF are in oversold area, so now buyers will look to buy; Third, we will discuss this when we study option chain. Again, make no mistake, FIIs will look to sell at unusual rise!
2) The figures in option chain are startling to say the least! On CALL side, there is fresh CALL UNWINDING on all strikes above 11100 (till 11800)- Can you believe this? Highest unwinding is at 11400 (7.42 lakhs) and next highest unwinding is at 11350 (6.48 lakhs). Does it mean that resistances have crumbled? So where is call writing? Some OK call writing is seen at 11050 (2.59 lakhs). What does it mean? This is the third reason which I was talking about earlier. FIIs are also pausing! With expiry set for tomorrow, people are waiting on sidelines. So now what about PUTs? There is impressive PUT writing on all strikes lower from 11100. Highest fresh PUT writing is sen at 10900 (7.30 lakhs) and highest total OI is seen at 11000 (24.12 lakhs) with fresh PUT writing at 7.22 lakhs on 11000 strike. So 11000 looks like good support as of now. If that breaks 10900 will provide support. Resistance, as written earlier, is still unclear and can move higher.
3) On charts, actually, the set up is completely bearish. In fact, perfect for fake bounce. And under other circumstances, I would have inclined to believe that Nifty may fall tomorrow even further. But I am not sure because of the reasons stated above. Therefore, trades will exist in both directions tomorrow. I have indicated on chart, where to sell and where to buy. Keep a Stop loss of 25 points on Nifty and around 60-75 points on BNF and book proft at 1:2 RR (Reward to risk ratio) to be safe.
Happy trading, All the best.
1) Provisional figures show that FIIs were Net Sellers by 1497 Crs and DIIs were Net Buyers by 2479 Crs, today. Final figures show that FIIs/FPIs were Net Sellers in Equity by 658 Crs but Net Buyers in Index futures by 939 Crs (This fuelled the rally) and in Stock futures by 1199 Crs (this helped too). So FIIs too paused. Why? First, Nifty is at 2 month old support and you don't break supports in one go. so buying did emerge in Nifty & BNF at crucial supports of 11000 & 28525 levels; Second, RSI of both Nifty & BNF are in oversold area, so now buyers will look to buy; Third, we will discuss this when we study option chain. Again, make no mistake, FIIs will look to sell at unusual rise!
2) The figures in option chain are startling to say the least! On CALL side, there is fresh CALL UNWINDING on all strikes above 11100 (till 11800)- Can you believe this? Highest unwinding is at 11400 (7.42 lakhs) and next highest unwinding is at 11350 (6.48 lakhs). Does it mean that resistances have crumbled? So where is call writing? Some OK call writing is seen at 11050 (2.59 lakhs). What does it mean? This is the third reason which I was talking about earlier. FIIs are also pausing! With expiry set for tomorrow, people are waiting on sidelines. So now what about PUTs? There is impressive PUT writing on all strikes lower from 11100. Highest fresh PUT writing is sen at 10900 (7.30 lakhs) and highest total OI is seen at 11000 (24.12 lakhs) with fresh PUT writing at 7.22 lakhs on 11000 strike. So 11000 looks like good support as of now. If that breaks 10900 will provide support. Resistance, as written earlier, is still unclear and can move higher.
3) On charts, actually, the set up is completely bearish. In fact, perfect for fake bounce. And under other circumstances, I would have inclined to believe that Nifty may fall tomorrow even further. But I am not sure because of the reasons stated above. Therefore, trades will exist in both directions tomorrow. I have indicated on chart, where to sell and where to buy. Keep a Stop loss of 25 points on Nifty and around 60-75 points on BNF and book proft at 1:2 RR (Reward to risk ratio) to be safe.
Happy trading, All the best.