Both indices continued their way down south and are expected to remain weak throughout this series. The next series has been a traditionally weak series, and it might only add to the fall. Global as well as Indian investors have exhibited weak confidence in the market especially fuelled by weak corporate earnings and due to the lack of convincing macro data.
Nifty opened weaker in trade today at 8698.05 and remained weak throughout the trading session. The high was 8699.85, and it touched an intraday low of 8596.7, breaching the crucial 8600 mark. The Nifty, however, recovered some of its losses to close at 8606. Down by 1.2% or 101 points. The 8500 put and the 8800 call showed the highest open interest build up in the current series.
Market breadth remained negative throughout the trade with 397 stocks advancing and 988 stocks declining at the end of the trade.
The Bank Nifty followed suit by opening weaker at 18618.5. The high for the day was approximately 7 points higher at 18625.8, and the low was at 18321.8. The Bank Nifty finally closed down by 1.6% at 18345.6. The 18000 put and the 18500 call saw the highest open interest build up.
FIIs were net sellers of 675.71 in the cash markets while DIIs were net buyers of 72.52 crores. In the derivative market, FII’s bought 408.67 crores of Index futures and bought 494.01 crores worth of Index options. In the Stock futures segment, FII’s sold 892.53 crores worth of stock futures and sold 85.09 crores of stock options.
Technical Analysis – Nifty & Bank Nifty
We know that the markets are heading south, and I have been stating that for quite some time. All indications were pointing towards impending weakness, and the recent pullback was a complete lackluster rally.
On the Ichimoku Heikin Ashi charts, the Nifty is on the verge of a Kumo Breakout on the bearish side, and one can take an anticipatory trade to maximize the profits. Given the volatility that we have seen in the last few days, we need to be prepared for some wild swings however the direction is confirmed bearish. The minimum expected target for the Nifty stands at 8300.
The Bank Nifty shows significant weakness on the Ichimoku Heikin Ashi charts. As mentioned yesterday, there is a short trade in the Bank Nifty and look out for a detailed Trade Setup on the Bank Nifty tomorrow. We can initiate a short on Monday and can expect decent profits from the trade. I am expecting a minimum target of 17250 in the Bank Nifty.