USD-INR still hovering at the highest level putting extra pressure on Indian economy.
US market along with EU markets are still correcting but at a reduced rate. This is in some contrast with yesterday’s move in Indian market.
In F&O space, FII, Pro, retail have all taken a bit of mixed position. In the face of sudden upmove of 23rd Aug, retail has taken an extra bearish position in near term.
FII back as a net buyer in cash segment. They may not be accumulating Nifty stocks but overall that is a good sign in short term even if this is being done as a bait to lure more buyers in the market.
As anticipated in last blog, Nifty went gap down on 23rd and it was immediately used by smart money to close bulk of their bearish position. Relentless upmove post that has already taken Nifty towards its resistance. Since there is no followup support from international/US market, a small gap down may be on the cards.
Nifty option chain, shows good fresh put writing at every level upto 17600. But that has not driven out the call writer exactly. So, a flattish day is also on the cards. OI chain analysis can be done in live market using sites like tradingtick or opstra.
Market likely to open around 50 points gap down. After initial volatility, market should settle between 17500-17600 throughout the day unless more negative cues come from international market. It should ideally be a premium eating day and one sided movement is not expected. In any case, a big move day (like yesterday), against the prevalent trend, is usually followed by an inside day candle.
In case of a gap down, 17625 will act as a resistance throughout the day. 17520 will act as a support. Market is expected to hover between/around these two levels for most part of the day. 17690 and 17490 are further levels on either side and market may trend on breaking any of these.
Good chance that today will be an inside day and in that case, expect some fireworks on expiry day with US market ripe for a sudden bounce any time (and no big news is scheduled to come). In any case, our market is buy the dips style in near term, at least for next two months. There may be some temporary negative pressure from 26-Aug till end of month.