Following global cues, our markets opened weaker in trade today, and the situation only worsened. The Bank Nifty showed some strength initially but could not hold up and succumbed to the broad-based selling. Panic gripped the markets, and both the key indices closed below one percentage point with the Nifty shouldering most of the losses.
Nifty opened at 8618.80, almost 90 points down and continued in the red throughout the day. It made a high a point above the open at 8619.95 and touched an intraday low of 8422.75. Towards the end of the trade, it recovered some of its losses and finally closed at 8448.10. A downtick of 1.83% (157.90 points). The 8500 put and the 8700 call saw the highest open interest build up however 8400, 8300 and the 8200 put also saw significant additions to open interest.
The Bank Nifty opened almost 40 points up in trade today ay 18386.20 and continued trading positive for some time before reversing its position. It touched an intraday high of 18500.30 and a low of 17984.70 before finally settling at 18112.80 at closing time. Down by 1.3% or 232.80 points. The 18000 put and the 18500 call was the most active in trade today with the highest open interest build up.
FIIs were net sellers to the tune of 1506.86 crores while the DIIs were net buyers of 962.5 crores in the cash markets today. The net number remain in the favor of the bears.
Technical Analysis – Nifty & Bank Nifty
We initiated a call in the Nifty (Futures) yesterday and we are in decent profits in a single trading day. While the direction of the trade is expected; what was not expected was the rate at which the Nifty fell today.
The Nifty continues to look weak and, in fact, has broken out of the Kumo on the bearish side, only confirming our position. The Chikou has also broken out clearly on the bearish side. The Nifty looks extremely week on the chart, and if this mayhem continues, we might be looking at much lower targets for the Nifty. Only time will tell how far this downfall continues.
The Bank Nifty relatively surprised me by the quantum of the fall. I was expecting a deeper fall today but then I guess the markets will take its own time to make up their minds.
Just like the Nifty our Bank Nifty (Futures) call has made headway today and continues strong in our favored direction. From an Ichimoku Heikin Ashi chart perspective, nothing has changed, and the trend remains negative.
Trade Setup Update
We initiated a long call in Tata Global a few days back. The trade did not work in our favor despite the strength shown by the stock earlier. It hit our pre-defined stop loss of 152, and we had to book losses in this trade.