US market had a bearish day post the holiday and there is follow-up selling observed everywhere. SP500 has broken an important support and futures are also trading lower now. Similarly, EU markets also seeing some selling pressure in anticipation of a more expensive winter ahead because of natural gas issue with Russia, even though the dependency on Russia for natural gas has substantially reduced in recent past. So, the pain in global market is still on.
In F&O space, FII, Pro have suddenly turned it around with all out bearish position whereas retailers have been made out and out bullish. So, a gap down seems certain and looking at world market, today such gap down might sustain also unlike buy the dips story that we have seen lately.
In the cash segment, FII and DII were net buyer. This has happened after long time and it shows that the Indian growth story is still intact even though there is some short lived turbulence ahead.
Nifty has still not confidently broken 17700. If breaks and sustains above 17720, then a quick move of 100 points expected but now, it looks impossible in this expiry.
Nifty option chain, for the expiry of Sep8, heavy call writing can be observed at levels 17700/17800 whereas next good but not so confident put writing observed at 17500 level. OI chain analysis can be done in live market using sites like tradingtick or opstra.
Market likely to open at least 100 points gap down. Only nearby support is at 17500 but that support may be short lived if comes under pressure. Practically there is no support on the downside.
Follow the levels shown on the charts below. Concentrate on intra-day trades mainly as a good bearish day is on the card as market looks like to provide one sided movement today or tomorrow, of not today.
Banknifty technical breakout has failed as expected. Now, a visit to nearby support will be needed.