NIFTY continued its consolidation yesterday as well by trading in the range of 80 points and finally closed almost at Wednesday closing price. BANKNIFTY showed its weakness but defended 23500 which was important support level for yesterday. However, it looks like consolidation will end today and both indices might breakdown.
US markets fell down sharply yesterday due to massive selling in Tech companies and that triggered selling in other sectors as well and US indices fell down by 3 to 5%. This affected European markets second half as well and they also fell down by 1 to 1.5%. All the Asian markets are in Red down by 1 to 1.5% down. SGX NIFTY is indicating gap down opening by 120 to 150 points. Most of the market participants were expecting follow up selling NIFTY after sharp decline in NIFTY on 31st August and i think today is going to be that day.
Technically speaking, there is no doubt NIFTY and BANK NIFTY going to break yesterday low at opening itself, however what is important is whether there will be follow up selling and can NIFTY hold 11325 support level today or early next week. If BANK NIFTY breaks 23380 then it can potentially test 22500 level. Here is important levels for NIFTY based on Daily charts. Resistance: 11585, 11680 and 11800. Support: 11325, 11110, 10890 and 10550. Important intraday support levels to watch out for today are 11430, 11365 and 11325; Resistance 11505.
F&O Data for 10th Sept expiry: Highest OI on CALL side at 11600 and 12000; on PUT side 11400 and 11500 (you can ignore 12500 as it has premium of only around 2 rs). More OI added yesterday at 11600 CALLs and at 11400 and 11500 PUTs. PCR is at 0.93 and Maxpain at 11500. Please note PCR and Maxpain or lagging indicators and they are likely to go down today. VIX is likely to raise sharply today. I would be looking at initiating Bear Call Spread after observing how NIFTY trades in morning session.
FIIs bought very little quantity of just 7 crores stocks in Cash markets and surprisingly DIIs have bought shares in Cash market after continuously selling for more than a month (except on 31st Aug).
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Disclaimer: Above analysis is just my opinion based on Technical Analysis, F&O Data study and my experience in the market. This information is for educational purpose only, and it possible that my analysis may go wrong. So, take your own decisions or consult your Financial advisor before taking any trading or investment decisions.
