FED has finally started tightening i.e., sucking excess liquidity from the market. So far, they were only relying on rate hike. Market is still shaky for this. US 10 year bond, dollar index all going up.
USD-INR going up creating an extra pressure on Indian economy.
US market still correcting but constant selling has already technically brought the market to oversold zone.
In F&O space, FII and Pro has reduced their short positions from what it was a day ago but it is still distinctly bearish. Retail is still very much bullish in F&O segment.
For a change, both FII and DII were net seller in cash segment. So, it turned out retail was only buyer.
Nifty went gap down on 22nd and every small upmove was being sold throughout the day. The whole upmove of Nifty was built on 6 gap-ups and we are coming down now in gap-downs. Another gap-down on 23rd August is on the cards unless US market shows some dramatic turn around.
Nifty option chain, shows good fresh call writing at every level upto 17500. A monthly expiry above 17700 looks highly impossible now. OI chain analysis can be done in live market using sites like tradingtick or opstra.
Market already being technically oversold, expect some short lived bounces from 23rd August onwards.
Market likely to open at least 50 points gap down. There should be selling pressure at least upto first half of the day. Market will show some bounce post noon but even those will be eventually sold off before end of day.
Market immediate support should be 17350-17330, 17170. Immediate resistance should be 17560, 17600, 17710.
Since market has covered has come down with more momentum, it has covered more distance than anticipated. So, expect a halt, even if temporary, to this fall earlier than expected and possibly from tomorrow only. The short covering is expected day after tomorrow, though.