Indices in panic mode - A notorious Shake Out of Weak Bulls?
NIFTY 50 EOD ANALYSIS -28-09-21
IN SUMMARY
O- 17,906.45
H -17,912.85
L- 17,576.10
C- 17,748.60
Close = -106.5 / -0.60%
H-L = 337 points
VIX 18.54 / +2.71%
FII DII: Data not available - likely to be negative by 1000 Crores.
SGX NIFTY @1940h - 17730 / -14 points
Likely open: Flat to mild nrgative.
CHART BASED CONCLUSIONS - 15 M Chart
A mild gap-up opening went sideways for a while and then began sell-off so severe that NIFTY broke 17600 levels as well and at one point appeared that even 17600 may be hard to sustain.
But then came a strong bounce back, however, NIFTY is still more than 100 points away from the P Close and below 17750.
NIFTY has thus made lower highs and much lower low which is not a good sign. 17600 is no longer a safe level to bank upon.
NIFTY WEIGHT LIFTERS & DRAGGERS
NIFTY LIFTERS
NIFTY DRAGGERS
RELIANCE
15.00
BAJAJ FINANCE
26.00
IOC
7.00
INFOSYS
23.00
TITAN
6.00
ICICI BANK
15.00
KOTAK BANK
6.00
BAJAJ FINSERV
13.00
JSW STEEL
5.00
TCS
11.00
39.00
88.00
Lifter - Draggers = -49
POSITIVES
NIFTY and BANK NIFTY both witnessed a strong bounce back from their day lows.
RELIANCE and KOTAK BANK withstood the intense selling pressure and ended in the green and were mainly responsible for the fast-paced recovery in the indices.
NEGATIVES
NIFTY broke 17600 levels on intraday basis.
17920 also appears to be a level to reckon with.
BANK NIFTY gave up higher levels very easily and also ended below 38000.
TRADING RANGE FOR THE REMAINDER OF THE WEEK:
As mentioned in yesterday’s post, the range mentioned here proved to be the one that was respected as far as the Support levels are concerned.
NIFTY 17500-18100
BANK NIFTY 37200-38500-800.
INSIGHTS / OBSERVATIONS
The intense sell-off was caused by the spike in VIX over the last few sessions even as the indices were making new highs. Usually, VIX should turn negative near or around ATH but in our case, it has risen 40%+ from the lower levels. This is not a good sign.
A wild swing was expected this week and that is exactly what happened today. Pre-Covid, Expiry Tuesdays used to be highly choppy and volatile, today was one such Tuesday.
BANK NIFTY High to Low was 1082 points! This is what caused the panic all around.
KOTAK BANK and RELIANCE stood rock solid and yet again proved that they have the tendency to not to follow the market and behave in their own manner.
It may be a good idea to always have a position in these two scrips as these seem to be hedging devices against wild swings in the indices.
What do you feel about this?
Thank you, and Happy Money Making!
Umesh
28-09-21
NOTE --
This write-up is not a prediction mechanism for the movement of Indices in the Indian markets as the markets are unpredictable in nature. I may refer to many data points in the article but I do not base my view on any of these standalone. In fact, I prefer to react to the price moves than predict the price moves. I also do not review Open Interest. Whatever data points I am using, are all stated in the article. The article title, as well as its contents, can at best be stated as --- This Is How I Read Nifty. I hope I have been able to set the expectations right.
---
IN SUMMARY
O- 17,906.45
H -17,912.85
L- 17,576.10
C- 17,748.60
Close = -106.5 / -0.60%
H-L = 337 points
VIX 18.54 / +2.71%
FII DII: Data not available - likely to be negative by 1000 Crores.
SGX NIFTY @1940h - 17730 / -14 points
Likely open: Flat to mild nrgative.
CHART BASED CONCLUSIONS - 15 M Chart
A mild gap-up opening went sideways for a while and then began sell-off so severe that NIFTY broke 17600 levels as well and at one point appeared that even 17600 may be hard to sustain.
But then came a strong bounce back, however, NIFTY is still more than 100 points away from the P Close and below 17750.
NIFTY has thus made lower highs and much lower low which is not a good sign. 17600 is no longer a safe level to bank upon.
NIFTY WEIGHT LIFTERS & DRAGGERS
NIFTY LIFTERS
NIFTY DRAGGERS
RELIANCE
15.00
BAJAJ FINANCE
26.00
IOC
7.00
INFOSYS
23.00
TITAN
6.00
ICICI BANK
15.00
KOTAK BANK
6.00
BAJAJ FINSERV
13.00
JSW STEEL
5.00
TCS
11.00
39.00
88.00
Lifter - Draggers = -49
POSITIVES
NIFTY and BANK NIFTY both witnessed a strong bounce back from their day lows.
RELIANCE and KOTAK BANK withstood the intense selling pressure and ended in the green and were mainly responsible for the fast-paced recovery in the indices.
NEGATIVES
NIFTY broke 17600 levels on intraday basis.
17920 also appears to be a level to reckon with.
BANK NIFTY gave up higher levels very easily and also ended below 38000.
TRADING RANGE FOR THE REMAINDER OF THE WEEK:
As mentioned in yesterday’s post, the range mentioned here proved to be the one that was respected as far as the Support levels are concerned.
NIFTY 17500-18100
BANK NIFTY 37200-38500-800.
INSIGHTS / OBSERVATIONS
The intense sell-off was caused by the spike in VIX over the last few sessions even as the indices were making new highs. Usually, VIX should turn negative near or around ATH but in our case, it has risen 40%+ from the lower levels. This is not a good sign.
A wild swing was expected this week and that is exactly what happened today. Pre-Covid, Expiry Tuesdays used to be highly choppy and volatile, today was one such Tuesday.
BANK NIFTY High to Low was 1082 points! This is what caused the panic all around.
KOTAK BANK and RELIANCE stood rock solid and yet again proved that they have the tendency to not to follow the market and behave in their own manner.
It may be a good idea to always have a position in these two scrips as these seem to be hedging devices against wild swings in the indices.
What do you feel about this?
Thank you, and Happy Money Making!
Umesh
28-09-21
NOTE --
This write-up is not a prediction mechanism for the movement of Indices in the Indian markets as the markets are unpredictable in nature. I may refer to many data points in the article but I do not base my view on any of these standalone. In fact, I prefer to react to the price moves than predict the price moves. I also do not review Open Interest. Whatever data points I am using, are all stated in the article. The article title, as well as its contents, can at best be stated as --- This Is How I Read Nifty. I hope I have been able to set the expectations right.
---
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