Seems, FED has finally started tightening i.e., sucking excess liquidity from the market. So far, they were only relying on rate hike. This may shake the market in short term. This is still just a guess and FED will never certainly disclose that openly.
US market has started correcting a bit after recent near vertical move. Note that this vertical move was also accompanied with lower average volume is always susceptible to a fast retracement.
In F&O space, FII and Pro has completely reversed their position from a day ago. They have taken a highly bearish position during the fall of 19-Aug-22. They have carried all these positions.
FII still net buyer in cash and DII net seller. This gives a confidence that the downturn that is just started, may be, is just a passing cloud and at best, will sustain till end of month.
Nifty has taken a support on the trendline which it broke 3 days back. This is just a saving grace and a matter of time before subsequent hit to that trendline would break it for sure.
Nifty option chain, shows good fresh call writing at every level upto 17800. A monthly expiry above 18000 is not possible now. Possibly, 18K cannot be crossed even by August end. OI chain analysis can be done in live market using sites like tradingtick or opstra.
Market likely to at least 50 points gap down. There should be selling pressure throughout the day. Every upmove should be sold. An initial upmove can be there in the first hour which will not sustain.
Market immediate target (positional) should be 17600, 17300, 17200. Cannot see the market below 17200 in this expiry.
Since smart players have taken huge short positions, expect all immediate downmoves to complete by 24-Aug first half. Post that, a short covering can come only till end of this expiry. Nothing inherent will change in the market and downturn will resume after expiry.