NIFTY for 10th October
It was disastrous day for bears. Nifty climbed up by 186 points and Banknifty by more than 1000 whopping points! Those who have read my yesterday's post on Banknifty would recall that I had written about strong buying coming in Banknifty (which would push nifty up) since HDFC Bank, ICICI Bank and Kotak bank were at their critical fibonacci levels. Today, at close, HDFC bank was up by 3.48%, ICICI Bank by 4.95% and Kotak Bank by 3.64%. I also wrote that due to weakness in Nifty the move may fizzle out at higher levels. There I went completely wrong. The Banknifty storm demolished all resistances in it's and Nifty's path. And in process stopped out both short trades. So now moot question is- what fuelled this big rally and what might happen tomorrow, on expiry day ? As for reasons for today's phenomenal rise, three come to my mind:
1) During market hours, govt announced that it is increasing DA for central government employees by 5%. That extra money will do a lot by increasing disposable income in the hands of around 50 lakh serving employees and 62 lakh retired employees. This also speaks of intent that govt has in improving economic conditions, which is very important from FII/FPI point of view.
2) Brent crude is below $60 per barrel. At our market openning, it was seen at around $58 per barrel which is pretty good for us.
3) From technical standpoint, as I wrote yesterday, above mentioned three banks were at or between 50% and 61.8% of their Fibonacci levels which are known to give strong reversals. So what bulls were waiting for was some positive trigger, which in my view was provided by govt announcement and oil price drop.
For tomorrow, let's examine usual data.
1) FIIs were net sellers today too by 485 Crs and in absolute figures FIIs sold around 6000 Crs worth shares, which was much higher than yesterday but close to average of other days. DIIs were net buyers by 956 Crs. Their buying abosolute figure is 3771 Crs which is closer to average of all other days. So then what caused such huge rally? who bought? I think retail participants, people like you and me, bought a lot today. Retail buying looks much higher today than what normally is.
2) Yesterday I wrote that 11200 looks solid resistance on the basis of option chain data. Today it was demolished without any opposition. So strong was buying momentum that now 11200 strike shows highest unwinding on CALL side. From PUT side build-up, 11200/11250/11300 all look good supports but I would take 11200 & 11250 as serious supports. On CAll side, 11500 looks Ok resistance. But tomorrow being weekly expiry these figures can change in big way.
3) On daily chart, Nifty closed above all crucial long term exponential averages (20,50,100,200 DEMA) and gave a much higher high and lower low thereby finishing as a strong green candle. Since today it was big rally, tomorrow some drop is possible but all these average levels will now act as support. On 15 min chart I have marked a buying area and a selling area which to me looks reliable.
All the best. Happy trading.
1) During market hours, govt announced that it is increasing DA for central government employees by 5%. That extra money will do a lot by increasing disposable income in the hands of around 50 lakh serving employees and 62 lakh retired employees. This also speaks of intent that govt has in improving economic conditions, which is very important from FII/FPI point of view.
2) Brent crude is below $60 per barrel. At our market openning, it was seen at around $58 per barrel which is pretty good for us.
3) From technical standpoint, as I wrote yesterday, above mentioned three banks were at or between 50% and 61.8% of their Fibonacci levels which are known to give strong reversals. So what bulls were waiting for was some positive trigger, which in my view was provided by govt announcement and oil price drop.
For tomorrow, let's examine usual data.
1) FIIs were net sellers today too by 485 Crs and in absolute figures FIIs sold around 6000 Crs worth shares, which was much higher than yesterday but close to average of other days. DIIs were net buyers by 956 Crs. Their buying abosolute figure is 3771 Crs which is closer to average of all other days. So then what caused such huge rally? who bought? I think retail participants, people like you and me, bought a lot today. Retail buying looks much higher today than what normally is.
2) Yesterday I wrote that 11200 looks solid resistance on the basis of option chain data. Today it was demolished without any opposition. So strong was buying momentum that now 11200 strike shows highest unwinding on CALL side. From PUT side build-up, 11200/11250/11300 all look good supports but I would take 11200 & 11250 as serious supports. On CAll side, 11500 looks Ok resistance. But tomorrow being weekly expiry these figures can change in big way.
3) On daily chart, Nifty closed above all crucial long term exponential averages (20,50,100,200 DEMA) and gave a much higher high and lower low thereby finishing as a strong green candle. Since today it was big rally, tomorrow some drop is possible but all these average levels will now act as support. On 15 min chart I have marked a buying area and a selling area which to me looks reliable.
All the best. Happy trading.
כתב ויתור
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