Thanks to Putin, it was a black Thursday world over. The main impact has already been taken into account but there will be some aftershocks. Do not expect Nato/USA to take any appreciable actions in reality.
Crude, gold both have given breakout as it should be. Crude itself is a bigger concern for economies like India.
Strangely, Dow and S&P recovered completely by the end of US market. This is mainly because of a good job report and expectation that because of global turmoil, Fed might slow down the tapering off.
India news/concerns:
In F&O space, positions for new expiry is not built yet completely and all participants are bit mixed in their approach given that no one knows in which direction Putin and others will take it further.
FII again sold around 6500 crore on 24-Feb and DII consumed more than that. Also to be noted that FII is constantly taking bullish stance in stock future. This is sort of indication that we are at fag end of correction.
Technical:
On 24-Feb, there were no positives in the market as such except that expiry held the market mostly after a big gap down. Finally it gave up.
Dow was ridiculously choppy in the trading and recovered 1000 points from the low. This may also be the low for the year now unless global cues become worse which is highly unlikely.
Looking at the recovery from Dow, SGX Nifty showing at least 200 points gap up on 25-Feb. Whether that will sustain during the day is a different question. There will be trapped buyers at every level now who will come out asap.
Nifty option chain of next weekly expiry is showing 16500 is the level where market will try to find a balance. Though OI data is not completely formed yet but safely 16400-16500 is the level we should settle down for the time being. OI chain analysis can be done in live market using sites like tradingtick or opstra.
Expectation:
Market likely to open at least 200 points gap up. It will be choppy for the first two hours till global market gets some more news on the development. The important support of 16400 may work as a resistance now. One should keep track of the OI chain during the day to understand the sentiment of coming week.
Overall expecting a seriously volatile but bullish day today. Most of the bullishness will give up in late trading. New levels including the downwards one are given below.
People who carried only put or call buy positions will be in serious trouble given that very high Vix might collapse right at the beginning which will seriously reduce the premium, even if direction is right. Suggestion for them is to come out in breakeven or with some small profit.
