Indices Face Altitude Issue Again, Fall Further - Caution Ahead!

  • Stock Market Analysis
  • Editors Pick

NIFTY O / H / L / C

16474.95/ 16514.30/ 16293.35/ 16356.25 [-60.10/-0.37%]

BANK NIFTY O / H / L / C

35165.65/ 35449.90/ 34831.75/ 34946.15 [-49.85/-0.14%]

India Vix 19.84/-2.89%

FII DII Data -580 Crores

SGX Nifty @ 1810h Flat

TOP 5 CONTRIBUTORS OF NIFTY

Lifters 48

Draggers 94

Net -46

TOP 3 CONTRIBUTORS OF BANK NIFTY

Lifters 504

Draggers 416

Net +88

[Interesting that despite Bank Nifty ending in the red, the Top 3 share is in the green]

CHART BASED DETAILS & ANALYSIS IS GIVEN IN THIS VIDEO:
https://youtu.be/G0mi_FZ5Elc

POSITIVES

State Bank Of India (NS: SBI ), TCS (NS: TCS ), HDFC Bank (NS: HDBK ), and Bajaj Finance (NS: BJFN ) ended in the green and were the lead contributors to Nifty . Without their help, Nifty may not have ended at 16356.

NEGATIVE

Bank Nifty ended the day below 34950.

Reliance (NS: RELI ), Infosys (NS: INFY ), ICICI Bank (NS: ICBK ), Axis Bank (NS: AXBK ), and Kotak Mahindra Bank Ltd (NS: KTKM ) ended in the red.

India Vix is down but it keeps jumping up as soon as selling begins.

The FII net selling keeps outnumbering the DII buying.

The clarity on account of RBI policy failed to propel the indices.

SUPPORTS & RESISTANCE LEVELS

Nifty – Support 16200-16300 Resistance 16500-600-16650

Bank Nifty - Support 34800-35000 Resistance 35400-600-800-36000

TRADING INSIGHTS & OBSERVATIONS

  1. Just when we expect the indices to open sideways to gap-down, they surprised the participants with a modest gap-up open which once upon a time used to be considered as a good open. However, these days, even 100+ points on Nifty on the upside gets sold in and today was no different.
  2. Nifty opened +0.36% and Bank Nifty opened +0.48%, and it was Nifty which was sold into by the FIIs via Reliance & Infosys as these two are the heavies and have an immediate impact on Nifty. Bank Nifty managed to stay in the green thanks mainly to HDFC Bank. This stock could make or break the day for the indices even if Reliance & Infosys do not turn positive.
  3. When the gap-up open was on for a few minutes, the India Vix went below 20, but was soon back up above 20.5 and increased as the RBI policy announcement came closer.
  4. In the first half an hour itself, Nifty fell 130+ points from the initial day high and retested the low of 7-6. This change was quick and then influenced Bank Nifty, as well as the time, came calling for the news release.
  5. While the RBI Governor was speaking, Nifty quickly broke 16300 and Bank Nifty broke 35000, and then 35900 with ease. And then, both the indices shot up possibly when the news release was on the expected lines.
  6. Nifty went up sharply in 15 minutes to cross 16500 and Bank Nifty crossed 35400, but the US Futures were in the red so this joy ride had to come to an end, and then the indices moved within a range possibly waiting for the trigger from the FTSE trades or the usual late sell-off by the FIIs.
  7. And when one is banking on the side of the FIIs, especially for sell-offs, they generally do not disappoint. Today, their show of the usual sell-off started soon after 1200h and ran for almost 3 hours as the pace of selling was gradual.
  8. Nifty was made to travel back from 16514 to 16311, a fall of 200+ points, and Bank Nifty fell from 35449 to 34831, a fall of 600+ points and it also registered a new low for the day. The indices then ended well below the crucial lines of 16400 for Nifty and 35000 for Bank Nifty.
  9. Even when the RBI policy is now out of the way, the Indices have not been able to decide the course of action for the weeks ahead, and when there is indecision, a negative bias is obvious.
  10. It is interesting that the Asian markets were in the green and yet we kept falling - we are relying heavily on the markets that have different types of challenges to handle. Of course, inflation, and prolonged war-related matters are common for most of the markets.
  11. As a market participant, all I know is that if markets lack strength and there is no strong DII support to counter the onslaught of the FIIs, we may find it hard to recover as at some point in time, the DIIs also would need to sell to make new buys.
  12. And when both the big heads end up on the sell side, there may not be enough buyers around prompting an easy and further fall in the indices. Is this what is on the horizon?

Note: Posted purely for informational & educational purposes only.

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  • eeshwar naidu @eeshwar naidu
    very good assessment as usual. Thanx.
    Like 1
    • Umesh Rindani @Umesh Rindani
      Thank you for your support.
      Like 1
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