US market took a pause on 29-Aug after a big down day. This was expected but still we have to see whether the downfall will resume or there will be a dead cat bounce. Any bounce will be sold off in US market. Recent trend in US market shows that a big down day is usually followed by further selling after a pause of 2 days.
In F&O space, FII, Pro have all taken a bit of bearish position whereas retail has taken a bullish position. So, obviously, smart money still temporarily bearish.
In the cash segment, FII net seller and DII is net buyer. Overall, volume is still less than normal.
India market shows good resilience on 29-Aug after around 400 points gap down. There was no follow up selling and instead, we saw good revival. So, this reiterates our stand of a strong Indian market in mid term.
Nifty took support at 17160 and resistance at 17350 level. 17350 may not be a strong support in case it breaches the same level from top once more.
Nifty option chain, for the expiry of Sep1, fresh call and put writing was observed at 17300 level. Any opening above 17400 level might first bring the Nifty down to 17300 to give those call writers a safe exit. OI chain analysis can be done in live market using sites like tradingtick or opstra.
Market likely to open around 50 points gap up. Nifty may see some initial selling pressure from higher level. As the day progresses, Nifty may go for higher level. But crossing 17490 will be tough. Instead, given that there is a holiday tomorrow, a sideways premium eating market is anticipated after initial pressure.
Follow the levels shown on the charts below. Make sure not to carry any position overnight as US market is on the verge of further sell off and India market at least responds to that.