Nifty Analysis: Wild Ride Amid Market Volatility

 

FII Activity: Bullish Sentiment in Nifty Index Futures

Foreign Institutional Investors (FIIs) displayed a bullish approach in the Nifty Index Futures market by buying 5,134 contracts worth ₹281 crores. This resulted in an increase of 668 contracts in the net open interest.

FIIs added 4,501 long contracts and covered 3,022 short contracts, reflecting a preference for increasing their long exposure while also reducing their short positions in Nifty Futures. With a net FII long-short ratio of 0.81, it is evident that FIIs strategically utilized the market movement to add long positions and reduce their bearish stance.

On the other hand, Clients covered 26,092 long contracts and 9,780 short contracts, signaling adjustments in both directions.

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Current Positioning in Index Futures:

• FIIs: Holding 41% long and 59% short positions.
• Clients: Holding 60% long and 40% short positions.

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Analysis:
FIIs are showing a bullish bias, adding to their long positions while reducing shorts, indicating confidence in market strength. Meanwhile, clients have adjusted their positions by significantly reducing exposure on both long and short sides.

Traders should monitor these shifts closely, as they could provide insights into upcoming market movements.

As Discuused in Last Analysis

Nifty Analysis: Volatility Persists with Venus Opposition Mars and Bearish Candlestick Formation

We witnessed a volatile move today due to Venus Opposition Mars, with Nifty forming a bearish candlestick, continuing to trade within the outside bar range established on 5th December. With Mercury turning direct this weekend, it is strongly advised to carry overnight positions with a hedge.

Additionally, today being Friday the 13th, which is often considered inauspicious, adds another layer of caution for traders. On Weekly we are forming NR21 pattern suggesting big move in coming week.

Key Levels to Watch:

• For Bulls: A move above 24,700 is required, with confirmation of a range breakout above 24,770.
• For Bears: A close below 24,575 will indicate weakness, with further downside confirmation if the price closes below 24,500.

How to Recover from a Blown Trading Account: A Roadmap for Stock Traders

Nifty experienced a wild ride today, falling nearly 300 points before recovering the entire move and closing 200 points in the green. A similar level of volatility was observed during the 5th December Nifty expiry, and today’s swings coincided with the Sensex Weekly expiry.

The price fluctuations, despite the absence of any major macroeconomic or corporate news, suggest the influence of hedge fund activity in options. This also highlights the lack of depth in our markets, as such wild moves are typically more common in US or European markets. Regulators need to take significant steps to improve the options market structure and reduce such volatility.

Without additional tools, navigating such sharp intraday moves can result in substantial losses. Today’s low was around the Monthly Open of 24,140, which proved to be a strong support level. As Gann always emphasized the importance of the Open price, today was a live example of how these old studies still work perfectly in modern markets.

Now Bulls need to close above 24800 above 24770 which is Octave point as shown in below chart. Any close above 24800 can open gates for rally towards 25000/25147.

There is a possibility of a gap-down opening on Monday, as we have two significant astrological events:

1. New Moon
2. Mercury Turning Direct

Traders should exercise caution and manage positions effectively in anticipation of further volatility.

 

 

Nifty Trade Plan for Positional Trade ,Bulls will get active above 24463 for a move towards 24582/24621. Bears will get active below 24365 for a move towards 24305/24227

Traders may watch out for potential intraday reversals at 09:15,10:12,11:15,12:56,02:33 How to Find and Trade Intraday Reversal Times

Nifty December Futures Open Interest Volume stood at 1.08 lakh cr , witnessing liquidation of 2.5 Lakh  contracts. Additionally, the increase in Cost of Carry implies that there was liquidation of SHORT positions today.

Nifty Advance Decline Ratio at 42:08 and Nifty Rollover Cost is @25178 closed below it.

Nifty Gann Monthly  Trade level :24406 close above it.

Nifty has closed above its 20 SMA @ 24409 Trend is Buy on Dips till holding 24400.

Nifty options chain shows that the maximum pain point is at 24400 and the put-call ratio (PCR) is at 0.92 Typically, when the PCR open interest ranges between 0.90 and 1.05, the market tends to remain range-bound.

Nifty 50 Options Chain Analysis

The Nifty 50 options chain indicates that the highest open interest (OI) on the call side is at the 24500 strike, followed by 24600 strikes. On the put side, the highest OI is at the 24300 strike, followed by 24200 strikes. This suggests that the market participants are expecting Nifty 50 to remain range between 24500-24800 levels.

In the cash segment, Foreign Institutional Investors (FII) bought 2335 crores, while Domestic Institutional Investors (DII) sold 750 crores.

Traders who follow the musical octave trading path may find valuable insights in predicting Nifty’s movements. According to this path, Nifty may follow a path of 23218-23889-24600-25310 This means that traders can take a position and potentially ride the move as Nifty moves through these levels.Of course, it’s important to keep in mind that trading is inherently risky and market movements can be unpredictable.

You cannot achieve mastery with a mediocre effort. If you want big returns in the stock market, you must make your trading a priority.

For Positional Traders, The Nifty Futures’ Trend Change Level is At 24562 . Going Long Or Short Above Or Below This Level Can Help Them Stay On The Same Side As Institutions, With A Higher Risk-reward Ratio. Intraday Traders Can Keep An Eye On 24556, Which Acts As An Intraday Trend Change Level.

Nifty Intraday Trading Levels

Buy Above 24700 Tgt 24743, 24785 and 24824 ( Nifty Spot Levels)

Sell Below 24674 Tgt 24630, 24580 and 24512 (Nifty Spot Levels)

Wishing you good health and trading success as always.As always, prioritize your health and trade with caution.

As always, it’s essential to closely monitor market movements and make informed decisions based on a well-thought-out trading plan and risk management strategy. Market conditions can change rapidly, and it’s crucial to be adaptable and cautious in your approach.