I hope traders who read my post yesterday did manage to earn some profits on short side today. Look at the extent of fall based on following observations:
1) Sensex logs worst fall in 11 months by falling 770 points intra-day.
2) Among Nifty 50, only 2 advanced, 48 declined. 2 stocks advanced were Tech Mahindra and HCL Technologies (due to fall in Rupee).
3) Rupee fell below INR 72 and closed much below at 72.4050. Such systematically steep was the fall that open was very near to high and close was very near to low ( Open:71.9825, Low:71.9800 and high:72.4075, close:72.40- Note: The scale is inverted in USD/INR case).
4) All the 12 component-banks of BANKNIFTY declined and that too by more than 1%.
Let us now analyse using some relevant data about what we are likely to see tomorrow.
1) FII & DII data- On provisional basis, FIIs were Net sellers by 2016 Crs whereas DIIs were Net Buyers by 1251 Crs. FIIs/ FPIs are still selling and today the amount crossed by 2000 Crs.
2) Option Chain Data- On PUT side there is nothing much that inspires buying. The highest total outstanding OI (14.18 lakhs) is at 11800 with 3rd highest fresh Put writing ( 1.45 lakhs) near ATM strikes. Fresh highest Put writing (3.82 lakhs) is at 11600 strike which has 5th highest total OI (8.81 lakhs) near ATM strikes. CMP is 10797. There is unwinding on all strikes above 10900. So Put writers are not even hopig that Nifty might rise! On CALL side, however, there is significant build up of contracts above 10900 strike. Total highest OI (29.33 lakhs) is at 11000 strike and fresh highest Call writing (19.83 lakhs) is at 10900 strike. For now 10900 looks good resistance but no decent support to me as per OC data.
3) Charts- On daily Chart, Nifty finished as a strong red candle with lower low and lower high than previous day's candle. The low made today is quite close to closing price signifying that there wasn't much recovery after hitting low. That shows the loss of confidence.The low is also very near to low made on 26th August, the day market reacted to FM's budget reversals (FPI surcharge,etc.). My reading for tomorrow is still bearish. Right now DJIA (Dow jones) is showing 340 points down. This global weaknes will no doubt influence our openning too. So if we open gap down- don't short. After sucha massive fall, some buying can emerge. Clear Selling levels are mentioned on chart if price reaches there, otherwise it will have to be traded as per live market movement.
All the best. Happy trading.
1) Sensex logs worst fall in 11 months by falling 770 points intra-day.
2) Among Nifty 50, only 2 advanced, 48 declined. 2 stocks advanced were Tech Mahindra and HCL Technologies (due to fall in Rupee).
3) Rupee fell below INR 72 and closed much below at 72.4050. Such systematically steep was the fall that open was very near to high and close was very near to low ( Open:71.9825, Low:71.9800 and high:72.4075, close:72.40- Note: The scale is inverted in USD/INR case).
4) All the 12 component-banks of BANKNIFTY declined and that too by more than 1%.
Let us now analyse using some relevant data about what we are likely to see tomorrow.
1) FII & DII data- On provisional basis, FIIs were Net sellers by 2016 Crs whereas DIIs were Net Buyers by 1251 Crs. FIIs/ FPIs are still selling and today the amount crossed by 2000 Crs.
2) Option Chain Data- On PUT side there is nothing much that inspires buying. The highest total outstanding OI (14.18 lakhs) is at 11800 with 3rd highest fresh Put writing ( 1.45 lakhs) near ATM strikes. Fresh highest Put writing (3.82 lakhs) is at 11600 strike which has 5th highest total OI (8.81 lakhs) near ATM strikes. CMP is 10797. There is unwinding on all strikes above 10900. So Put writers are not even hopig that Nifty might rise! On CALL side, however, there is significant build up of contracts above 10900 strike. Total highest OI (29.33 lakhs) is at 11000 strike and fresh highest Call writing (19.83 lakhs) is at 10900 strike. For now 10900 looks good resistance but no decent support to me as per OC data.
3) Charts- On daily Chart, Nifty finished as a strong red candle with lower low and lower high than previous day's candle. The low made today is quite close to closing price signifying that there wasn't much recovery after hitting low. That shows the loss of confidence.The low is also very near to low made on 26th August, the day market reacted to FM's budget reversals (FPI surcharge,etc.). My reading for tomorrow is still bearish. Right now DJIA (Dow jones) is showing 340 points down. This global weaknes will no doubt influence our openning too. So if we open gap down- don't short. After sucha massive fall, some buying can emerge. Clear Selling levels are mentioned on chart if price reaches there, otherwise it will have to be traded as per live market movement.
All the best. Happy trading.