Yesterday both banknifty and nifty was very volatile and gave good opportunity to earn in both sides. For today 32700-32800 will be support area where buying can be done with more confidence. I would say blind buy. On higher side, 33700-33750 is resistance zone where profit booking can be seen and fresh short can be made too. But keep in mind that this is bottom formation process and both nifty and banknifty are ready to give breakout in upside(probably). So positional traders should wait for good opportunity and aggressive positional trader can make anticipation trade in long side from here with stop loss as per own comfort. I am personally looking for buy on dip strategy
Support- 15350-15400 Resistance- 15700(first) and 15900(second)
Two triggers: crude and metals for inflation have come down significantly. This is why, expectation now from here is decline in inflation. Russia is also expected to announce ceasefire after winning Donbas(still fighting). These two triggers are positive for overall market. Bond yield is decreasing too but this is because of expected recession.
Technically, we are seeing high volatility between 15200-15700 which is first sign of bottom formation. Any dip toward 15400 will be buying opportunity and near 15700 one can go for sell. But perfect sell opportunity exists at 15900 which is second resistance.
PCR is near 1 and FIIs net long position in index is at 24%. Its neutral
My view on market for next 2-3 months
Now we are getting clarity from Federal reserve on inflation, interest rate, economic growth and employment. If we rank them as per priority of Fed then can put them this way: 1) Bring inflation down by raising interest rate to 3.5% to 3.75% by end of this year 2) focus on Job which is already at highest level so small uptick in unemployment will be bearable 3) For long term benefit short term recession can be accepted while raisin rate of interest. So fed is clearly giving warning to stock market investors.
What can we expect from here as an investor ?
Market will be data driven from here in short. As fundamental analyst you must track Consumer price index(CPI), Wholesale price index(WPI), real estate data(new home sales and existing home sales), Purchasing managers index(PMI), Non farm payroll, Bond Yield(10yr and 2yr). These data are from US. In India, CPI, WPI, PMI, IIIP, GST collection, Crude price, Metal price, Bond yield(10yr) are important data we need to focus.
As most of the fear is already factored in there, maximum 10% further decline is possible in upcoming 2-3 months. We can see 5-10% pullback rally also which will be again sold off. That depends on inflation data and possibility of recession. In short, its sell on rise market and not a great time for investors. But those who are long term investors must buy when market is down. This is what investing. Buy when there is pain in the market and don't look for exact bottom.
Those who are long term investors should invest 50% capital at current market price as many good fundamental stocks are available at good valuation. Unfortunately I guess many already are fully invested and facing loss. So those can wait for now, don't average at this price(especially with borrowing). Averaging can be done only in those stocks which are down by 50% or more but fundamentals are still intact. many IT stocks are available at 50% discounts for example. Avoid metal and Oil & Gas companies for now. Any pullback should be used to exit as they are cyclical in nature.
What traders do?
Focus on index trading. Nifty and banknifty are great tools for traders in these days. Stock futures and options should be avoided. Trade in both sides with strict stop loss. If you are only buyers then always look for risk reward and try to buy at support area. If you are only seller then always look for sell near resistance level.
Most important thing
Don't trade based on prediction from market astrologers on telegram and whatsapp groups. Follow only one group or analyst if you have to because following a lot of groups can be confusing and ruin your capital only.
Thanks and regards(if you have read) Kaushal K Singh Stock Shiksha
Banknifty yesterday tried to stay above 32750. This is support for today. Below 32750 we will see 200-300 points fall. On upper side, 33000 will be resistance on expiry day. Above 33000 we will see short covering and can give 200-300 points in upside in quick time. Most probably Trading range will be 32750-33000.
Jerome Powell(Fed chairman) first time has accepted that recession could be a possibility because of Fed's tightening policy. This is what market participants already have known. Powell also said Fed's first priority is to bring down inflation to 2%. Recession and job market would be second third priority. Probably Fed wants fall in equity class assets because higher return in stock market also has pushed inflation higher. I will further write analysis on this one.
Technically, 15380-15400 is support zone where buying is recommended. Yesterday, the level gave good support. Below 15380 we may see fall to 15200. On higher side, above 15500 we will see short covering due to weekly expiry day for Index options.
PCR is 0.81 and FIIs net long position is at 21% which are neutral.
Banknifty is also expected to remain sideways. Buying can be seen between 32800-33000. Near 33800 selling can be done. Trade with strict stop loss because volatility can increase again before testimony of Powel
Fed chairman Jerome Powell today will testify today in US which will be trigger for today. Crude and metal prices seem to be weaken further due to expected recession.
Technically, Nifty refused to sustain above 15700 which was resistance for yesterday. This resistance is now confirmed and bull run only will resume above 15700. Till then it is going to be sell from high and buy from low. Near 15400 level buying again can be done. Traders are advised to trade in both sides unless it closes above 15700. Strict stop loss we must follow while trading
Bank nifty is expected to open with gap up opening but we have to watch if it is going to closes above 33000 or not which is psychological level. Most of the call OI exists between 33000-33200. This zone is strong resistance zone and hence traders can look for sell between this zone. On lower side, fall toward 32300-32400 will be buying zone where long side position can be created. Just like Nifty, try to trade in both sides with strict stop loss.
As there is no strong global negative trigger as of now Nifty is likely to open with gap up. Trigger will come from US market and we have to watch where US indices will close today. Home sales data will come today in US which will show if there is slowing down in housing market or not. This data will show if recession is imminent.
Technically, Nifty at bottom formed two consecutive doji type candle which is sign of small reversal. This is why, near support area one should buy nifty with stop loss below 15100. Near resistance one can go for sell side with stop loss above 15720. Try to play in both sides with strict stop loss
Banknifty is at major support for now. Traders can buy near support area with stop loss below 32000. Near given resistance we should look for selling with stop loss above 33200. In simple words, trade in both sides with strict stop loss
Today US market will be closed due to Juneteenth. There is now trigger which can be reason for upside. How US market will react after Quadruple witching we can see from tomorrow. Crude on Friday fell sharply which is bullish trigger for Indian market.
Technically, there is downtrend in Nifty but dead cat bounce can be expected due to oversold as per RSI and PCR. Near support zone we can go for buy side position with stop loss below 15100. On higher side, selling can be done near 15500-15600 level with stop loss above 15700. Most probably there will sideways market
There is breakdown in banknifty too and hence we should go with sell on rise strategy. But we must wait for meaningful pullback and then go for short sell. Sell near given resistance only. Buying can be done near given support area. Strict stop loss one must follow while trading
Nifty is now at important level. It has come to the exact level which was once resistance. Now it can become support but confirmation is not there. Another point of view is that there is breakdown of inverted cup and holder pattern which says more downside can come in upcoming days. My view is we should wait and watch for meaningful pullback and then again we can sell it. Till then we should watch. If nifty comes near given resistance one definitely should go for sell. For buying purpose we still need some confirmation
Yesterday was nightmare for traders, especially for buyers. The downfall was very unexpected and even we failed to see(I have to admit). So what was the reason? It seems technical problem which is related to Quadruple witching day effect which comes 4 times every year in US when all 4 types of F&O contracts get squared off on the same day. Another reason could be expectation for more aggressive stand by Fed and other central banks.
Banknifty is expected to open with gap up and traders should go with buy on dip strategy. Profit booking can be seen near 34000 level and difficult to go beyond it due to heavy call writing there. On downside any dip toward 33000-33200 will be buying opportunity. In last hrs short covering can be seen. Trade with caution as today is weekly expiry.
Now Fed is trying to catch up the inflation curve with aggressive stand by raising interest rate by 75 basis points. Analysts were not happy with Fed's accommodative mode. This is why, US indices rose yesterday after Fed's decision. Another reason for rally was oversold market. Now our focus will be on upcoming data from US and India in upcoming weeks, especially inflation and consumption data.
Technically, Nifty is holding its support zone and now its ready to give pullback rally. Upside movement can be till 15900-16000. My strong conviction is Nifty will fill the gap which will be completed once we see Nifty at 16200. This is positional view. Traders should go for buy on dip strategy today. Intraday selling can be done near 16000. Stop loss must be there wherever you trade as there will be volatility due to weekly expiry of Nifty and banknifty
PCR is at 0.75 and FIIs net long position in index is 11 %, showing oversold market
The same inverted hammer appeared in Banknifty too so, reversal can be expected in banknifty also. If banknifty comes near 33000-33200 range then buyers can go for position in long side with stop loss below 33000 on closing basis. On higher side, 33800 will be resistance area where we can expect fall again. Selling can be done near resistance. PCR for banknifty is 0.61 which is oversold. Trade with caution as volatile session we can expect.
Now there is climax day that market can expect today. Federal Reserve is scheduled to publish monetary policy in US. Fed may hike rate of interest rate by 0.5-0.75% but some are hoping even 1% hike. Recent downfall in US indices already has factored in the worst possible outcome. All eyes will be on Jerome Powell who will attend press conference late night and give clarity on inflation, looming recession, and unemployment forecast. This is the single trigger traders should focus on.
Technically, 15650-15700 is major support and yesterday inverted hammer formed exactly at support. This is reversal signal so buyers can buy here with stop loss below 15600. Closing below 15600 will be confirmation of breakdown of inverted cup & holder pattern. On upper side, 15900-16000 will be major resistance for today where selling can be done. Play with strict stop loss before major event.
FIIs net position in indices is 11% and Nifty PCR is at 0.73 which are showing oversold
Inverted cup and holder formation is there in Banknifty too. Closing below 33000 will be crucial for further bear market as there will be confirmation of breakdown below pattern. Aggressive buyers can buy near 33000-33200 range with stop loss below 33000. Selling can be done near 33800 if there will be any pullback during the day.
Now in US analysts are expecting more hawkish stand by Federal Reserve. Some are expecting 1% hike in interest rate which well above 0.5% hike expectation by majority. This is spooking global market. Indian CPI data came at 7.04% which is below of May data. All eyes are focused now on FOMC meeting in US which will publish monetary policy tomorrow late night.
Technically, 15700 is major support for today. Closing below 15700 will be breakdown of inverted cup and holder pattern. Buyers can go for buy near support with stop loss below 15600. Sellers can sell near given resistance area. Keep strict stop loss amid high volatile session.
PCR is at 0.7 for Nifty and FIIS net position in index is at 12%. Both data indicating oversold market
There will be huge gap down opening in Bank nifty too. Below 34000 banknifty will be weak and can go to 33600 in intraday. In worst case scenario it can come to 33000. After gap down opening let it give some pullback and then go for sell. Near 33600 we can go for buy too. Wherever you trade keep strict stop loss
Technically, near 15900 nifty is expected to open. If nifty comes near 15750-15800 then traders can go for buy side position with stop loss below 15700. Selling can be done if you see pullback after gap down opening. sell near 16000, but as per chart resistance comes near 16180-16200 where one can go for blind sell. Ahead of fed meeting volatility will increase significantly and you will see swing in both sides. Trade with strict stop loss
Due to higher than expected inflation data in US, there is speculation that Federal reserve would prefer to more hawkish stance to tame inflation. This is why, US indices futures are trading in lower side after heavy fall on Friday. India also will release inflation data today which will come after post market hours. Bond yield for ten years bond is increasing everywhere ahead of FOMC meeting. FOMC will release new monetary policy on Wednesday. These are some fundamental trigger which we should keep in mind while trading today