Nifty Overall Analysis
Highly volatile session! Today we saw clash between the bulls and bears. Nifty fell near 100 points from the high point of the day in just 15 mints. Nifty formed “Shooting Star” in the daily candlestick chart which indicates that there is still some weakness for our markets. Index is forming ‘higher high higher low’ formation for the last couple of day which looks good for the bulls. Technically as we discussed yesterday, Index is facing some resistance around the 100 SMA. 50 EMA is approaching closer and 50 EMA should be watched closely. Currently our markets are consolidating after yesterday’s big surge. 10630 will be the major hurdle to cross and close above 10630 nifty will be super bullish.
Currently, Nifty PSU banks looks like bottomed out and PSU Index is the major cause for recent volatility. Contra investors can start to add some PSU stocks at current levels. FII’s were net buyers in the cash market and they have bought shares worth of 7028Cr and DII’s bought shares worth of 1613Cr today. FII’s bought Approx 9300 Cr worth of TCS shares from the promoters.
Nifty PSU Bank, Nifty Realty & Nifty Pharma sectors lead the rally and we saw some profit taking in Nifty IT & Nifty FMCG sectors. HINDPETRO, BPCL & INFRATEL were the major gainers and TCS, KOTAKBANK & NTPC were the major losers among the heavyweights. In the overall NSE stocks, Advance decline was in favor of bulls, 1046 stocks advanced and 449 stocks declined. 9 stocks made 52 week high and 66 stocks 52 week low as well.
Nifty Derivative Analysis
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FII’s bought 1441 long index futures and added 3820 short Index futures position. FII’s Net Index futures position is go here 21748 (Long positions).
Pro’s bought 2259 long index futures and covered buy Lyrica in mexico 5956 short index futures position. Pro’s Net Index futures position is 8854 (Short positions).
FII’s bought long 7687 call options and added 2700 short call options. Net call option positions in the index are 116305.
FII’s bought 1218 long put options and added 11116 short put options. Net put option positions in the index are 193089. (Every month FII’s buy around 2lakh put contracts for portfolio hedging)
PRO’s sold 18184 long call options and added 5922 short call options. Net call option positions in the index are -142126.
PRO’s bought 2143 long put options and covered 16338 short put options. Net put option positions in the index are -86408.
Put call ratio for the current series is 1.03
India VIX closed today at 14.46 VIX above 13 is bit cautious.
10500CE is having the highest OI in the call side.
10000PE is having the highest OI in the put side.
FII’s are adding long positions in the Index options for last few sessions. PRO’s have exited some long positions in the index options and currently short in the index options by 55K contracts. Today we saw put writing in 10500 & 10400 strikes. Call unwinding witnessed in 10600 strike and OI shifted to 10700 Strike.
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Nifty Technical Analysis
10630-10600 Zone will be a strong resistance and if index close above 10630 levels then chances are index will test 10900 levels soon.
Nifty closed above the 20 SMA. 100 SMA will be the near term resistance followed by 50 DMA.
10140-10100 zone acted as near term bottom and break below can trigger further selling pressure.
MACD is getting ready for a bullish crossover.
RSI is in no trade zone.
Nifty is facing strong resistance around the 100 SMA. 100 SMA acted as strong support many occasions during ongoing rally. When the support breaks, it will act as resistance. Above the 100 SMA, 50 DMA will be the short term resistance. Markets need to close above these pivotal moving averages to resume the uptrend. Chances are markets will consolidate few days before breaking these levels since we have witnessed a massive rally yesterday. Historically market consolidated after major intraday rallies. PSU banking sectors looks like bottomed out and contra investors/counter trend traders can look for some PSU stocks at current levels. Any good news on this sector will lead to massive short covering.
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