At around 2.20 pm, a buzz was heard that Finance ministry may roll back FPI surcharge and Nifty and Banknifty started rallying. In next hour or so Nifty went up from 10886 to close session at 11032 (+146). Now with finance bill already passed and first parliamentary session already over, how and when this would happen? Nobody knows. Nevertheless markets shot up on hope that it will happen assuming that this was only reason that FIIs/FPIs were selling. My contention is that it is one of the problems and NOT the only problem. Other noteworthy problems are overall poor corporate results which shows that economy is struggling on all fronts, all sectors. This was amply visible in RBI's credit policy press meet. 4th consecutive rate cut (which in itself shows precarious state of bank business) coupled with downgrading of GDP forecast and slew of measures to see that transmission is carried out to the last mile are proof of admission of slowdown in economy. And FIIs do worry about that most. Another cause for concern is trade war between USA & China. How it will pan out and how will it affect metal, auto and FMCG sectors to name a few is also cause for some headache. So I still don't think Selling is over. Today's upmove was sentiment driven and hence lasted for the day.
1) FII & DII Buy/ Sell provisional data shows FIIs were Net Sellers by 437 Crs and DIIs were Net Buyers by 291 Crs- too low figures, right? The final FII data shows, FIIs were net sellers in Equity by (only) 222 Crs, in index futures by 980 Crs and net buyers in stock futures by 608 Crs. So FIIs today sold less in equity and presumably DIIs bought a lot more to tilt favour in bulls' favour.
2) Option chain data (of next expiry, 14th August) shows on PUT side, highest total OI (10.92 lakhs) and fresh highest Put writing (8.65 lakhs) is on the strike of 10900. At ATM strike of 11000 also, there is handsome Put wrting and total OI. So now both 11000 and 10900 look good supports. On CALL side, highest total OI (11.83 lakhs) and highest fresh Call writing (5.36 lakhs) is also at 11100 strike. Put writing on 11000 and 11100 is more that highest Call writing on any strike! Call writers are not abondoning their positions on 11100, which means, this will be tough to scale. So as per option chain data, 10900 -11100 looks likely range for tomorrow.
3) On daily chart, Nifty again closed with higher low than previous candle. So as I wrote yesterday, NIfty is rising and falling on alternate days (since past 8 days) and today also it followed suit (as I wrote that it might despite the absence of support and Put writers). So by that logic Nifty looks likely to give a red candle with higher low. Armed with his data, I have pointed Shorting levels. Now these levels are just above and very near to CMP thereby increasing chances of trade happenning. Only word of caution is- due to today's euphoria it might open gap-up and run wild for first few minutes, so let it stabilise before taking short positions.
All the best. Happy trading.
1) FII & DII Buy/ Sell provisional data shows FIIs were Net Sellers by 437 Crs and DIIs were Net Buyers by 291 Crs- too low figures, right? The final FII data shows, FIIs were net sellers in Equity by (only) 222 Crs, in index futures by 980 Crs and net buyers in stock futures by 608 Crs. So FIIs today sold less in equity and presumably DIIs bought a lot more to tilt favour in bulls' favour.
2) Option chain data (of next expiry, 14th August) shows on PUT side, highest total OI (10.92 lakhs) and fresh highest Put writing (8.65 lakhs) is on the strike of 10900. At ATM strike of 11000 also, there is handsome Put wrting and total OI. So now both 11000 and 10900 look good supports. On CALL side, highest total OI (11.83 lakhs) and highest fresh Call writing (5.36 lakhs) is also at 11100 strike. Put writing on 11000 and 11100 is more that highest Call writing on any strike! Call writers are not abondoning their positions on 11100, which means, this will be tough to scale. So as per option chain data, 10900 -11100 looks likely range for tomorrow.
3) On daily chart, Nifty again closed with higher low than previous candle. So as I wrote yesterday, NIfty is rising and falling on alternate days (since past 8 days) and today also it followed suit (as I wrote that it might despite the absence of support and Put writers). So by that logic Nifty looks likely to give a red candle with higher low. Armed with his data, I have pointed Shorting levels. Now these levels are just above and very near to CMP thereby increasing chances of trade happenning. Only word of caution is- due to today's euphoria it might open gap-up and run wild for first few minutes, so let it stabilise before taking short positions.
All the best. Happy trading.