US market had a dead cat bounce day as it was highly oversold. In the process, it has broken out of a triangle in chart. In all probability, this is a temporary upmove which will be sold into eventually.
Crude oil price has reduced giving comfort to Indian economy but then a higher dollar index has balanced the benefit out.
In F&O space, FII, Pro are still having bearish position whereas retailers have been made out and out bullish. So, any gap up (looks likely looking at world market of last night) will be sold off. This selling will be done by smart money to either reverse their own bearish position or take benefit from it.
In the cash segment, FII is net buyer. This shows that sooner or later we are going to make new ATH which not far away.
Nifty has still not confidently broken 17700. If breaks and sustains above 17720, then a quick move of 100 points expected but now. Today is a day when this looks possible given that it is expiry day and a one sided movement can be anticipated.
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 up. This will challenge all call writers and since call writers here are mostly smart money, there is a high chance that market may immediately start coming down.
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.