Volatile Trade And Failed Bulls

The Bulls made multiple attempts at a comeback today, however, could not fuel the rally. The Bank Nifty essentially saw some extreme volatility and whipsawed throughout the day right up to the closing point. Amidst all this volatility, both the key indices ended in the red and bearish sentiments prevailed.

Market Action

Nifty opened weaker in trade today and made multiple failed attempts at a comeback. It opened in the red at 8416.10 and touched an intraday high of 8469.35. It made a low of 8352.70 in trade today. The close was 0.8% (70.35 points) down at 8377.75. The 8300 put and the 8500 call saw most of the action in terms of open interest build up. Market breadth was volatile throughout the day and at closing time, we had 570 stocks advancing and 792 declining.

The Bank Nifty traded in the green for the most of the day opening at 18102.30, recording an intraday high of 18328.30 and an intraday low of 18036.90. It finally closed flat at 18105.80, a difference of barely 7 points in the red. The 18000 put and the 18500 call saw significant open interest build up in trade today.

NSE data shows that FIIs were net buyers of 17488.73 crores and DIIs were net buyers as well for 1364.83 crores. I suspect this data however, this is what the NSE web site reports!

Market Outlook

Technical Analysis – Nifty & Bank Nifty

Nifty on a firm downtrend

Nifty on a firm downtrend

The Nifty is firmly in the control of the bears. The Ichimoku, Heikin Ashi Chart of the Nifty shows continuing weakness with no signs of any relief soon. Our call on the Nifty is going strong, and we have already achieved our second profit target today.

Based on the price action in the next one or two days, I might revise our profit targets. Once we cross the crucial third profit target and in case the Nifty does not show any signs of strengthening then it will be desirable to continue holding the position with a revised stop loss. We will come to it when we come to it 🙂

Signs of a minor pullback seen

Signs of a minor pullback seen

The Bank Nifty made an attempt at a pullback today however the Ichimoku Heikin Ashi chart of the Bank Nifty does not exhibit any strength. The failed pullback offers us an attractive opportunity to add further short positions to our trade.

On the charts, the Bank Nifty does stand out for a minor pullback. In case the Bank Nifty shows any further attempt at a recovery tomorrow, one can add fresh shorts to their existing position. If someone has still not taken a position, then one can initiate a fresh position on any rally that we see.


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