Indices spike - was this a reversal or new shorts created?,NIFTY 50 EOD ANALYSIS 07-12-21
In this post, I talk about the analysis for the day and the trading range for tomorrow. The video discusses with the help of the charts how the indices as well as leading stocks performed during the day and their likely play tomorrow.
O 17044.10
H 17251.65
L 16987.75
C 17176.70
EOD +264.45 points / -1.58%
India VIX 18.46/-8.05%
SGX Nifty 07-12-21 @ 1900h = +30 points
FII DII = +21 Crores
CHART BASED CONCLUSIONS using 5 Minutes Chart
Nifty opened with a significant gap-up and then expectedly sold off but quickly recovered and then started climbing up.
It then continued to clear resistances with relative ease except that in the last hour it could clear the 17250-60 line and fell from there.
Nifty as well as Bank Nifty have made higher highs and higher lows.
NIFTY WEIGHT LIFTERS & DRAGGERS
Top 5 Lifters contributed = 101
Top 5 Draggers contributed = 5
Net = +96
BANK NIFTY WEIGHT LIFTERS & DRAGGERS
Top 3 Lifters contributed = 572
Top 3 Draggers contributed = 0
Net = 572
POSITIVES
Nifty closed above 17150.
Bank Nifty OHLC above 36000.
India Vix down by 5%.
HDFC twins, ICICI Bank, Reliance and Kotak Bank lifted themselves to pull up Nifty.
The Advance Decline ratio was also quite positive.
NEGATIVES
Even today, the FIIs have sold more than 2,000 Crores and DIIs have just managed to buy identical amounts. So the weakness is still around. More about it in the Insights section.
TRADING RANGE FOR 08 Dec 21
The way the indices have behaved today, I feel it is best not to make a false attempt to draw the lines. I would wait for a couple of days - post RBI policy to start finding the supports and resistances. Every small rise is sold into - this indicates a bearish market.
Above was my comment for today and in view of the RBI policy announcement, I prefer to retain the same.
INSIGHTS / OBSERVATIONS
The day’s movements reminded me of the mock trading days that brokers carry out on some of the weekends. The numbers were all sort of unreal as till yesterday, it appeared that it was all hell broken over the markets. And overnight, nothing has dramatically changed except the discussions that the FIIs may have had with their overseas counterparts to which we have no means of knowing.
I am not sure who would have created and ended yesterday with a long position specifically for exiting today. I will have to dig social media deeper to check as I could not see any such messages proclaiming - I already knew about it.
The rally may have been more on account of short covering that may have been fueled by the indices breaching key resistance levels. On Nifty, after the resistance around 17100-120, the next resistance was around 17250-260 and the latter proved to be too hard to clear as the last hour of trading kicked in.
This tweet sums up the story behind index movements well -
Was this unexpected spike managed to create yet another free fall with today's highs as the shorting point?
What do you feel about this?
Here is the video link --
Thank you, and Happy Money Making!
Umesh
6-12-21
NOTE --
This write-up is not a prediction mechanism for the movement of Indices in the Indian markets as the markets are unpredictable in nature. I may refer to many data points in the article but I do not base my view on any of these standalone. In fact, I prefer to react to the price moves than predict the price moves. I also do not review Open Interest. Whatever data points I am using, are all stated in the article. The article title, as well as its contents, can at best be stated as --- This Is How I Read Nifty. I hope I have been able to set the expectations right.
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