US market still sell on rise. Even though, a cool off in job market is a good sign for inflation. Technically, S&P500 is near a good support. Need to see whether the low of last trading session still holds good or not. Note that 05-Sep is a US holiday.
In F&O space, FII, Pro have all taken a bit of bearish position whereas retail has taken a bullish position. So, obviously, smart money still temporarily bearish, at least, up to coming weekly expiry.
In the cash segment, both FII and DII are net seller. Overall, volume is still less than normal.
Nifty has spent considerable time between 17480 and 17640. If breaks and sustains on any side, a quick move of 150 points expected.
Nifty option chain, for the expiry of Sep8, fresh call writing was observed at 17600 level giving an impression that a gap up is unlikely whereas put writing at 17500 level from retailer will not sustain if there is a gap down. OI chain analysis can be done in live market using sites like tradingtick or opstra.
Market likely to open around 50-100 points gap down. If Nifty opens around 17480 level and breaks it towards downside then first half can remain bearish. A good recovery in second half is expected given the resilience of Indian market. Levels we can test 17480-17360-17230-17170.
Follow the levels shown on the charts below. Option buyers should not carry overnight positions. Option sellers can as overall range of 17200-17800 looks safe.
Banknifty which apparently looked stronger thus far because of all the expected rate hikes may finally see some profit booking since could not decisively cross 39600. A breakdown of 39200 can open lower levels there also.