Nifty Analysis: Emerging Signs of Market Exhaustion

FIIs Maintain Bearish Stance in Nifty Futures – April 23, 2024

Foreign Institutional Investors (FIIs) continued to exhibit a bearish bias in the Nifty Index Futures segment, shorting 7,047 contracts worth ₹513 crore. Despite this, the net open interest (OI) declined by 3,613 contracts, indicating some position unwinding alongside fresh short additions.

Breaking Down FII Activity

• Longs Added: 691 contracts

• Shorts Added: 1,756 contracts

FII Long-to-Short Ratio: 0.46
Current Positioning: 32% Long : 68% Short

✅ Interpretation:
The data suggests renewed bearish positioning by FIIs, with more shorts being added than longs. However, the decrease in total OI hints that some older positions were also squared off, showing a cautious but defensive market view.

Client Activity Snapshot

• Longs Added: 4,687 contracts

• Shorts Added: 9,116 contracts

Client Long-to-Short Ratio: 1.02
Current Positioning: 52% Long : 48% Short

✅ Interpretation:
Clients appear balanced, though slightly more aggressive on the short side. This shows hedging or positioning for potential pullback, especially after the recent sharp rally.

Market Takeaway

• FIIs are still net short, and the increase in fresh short positions suggests expectation of a near-term pause or pullback in Nifty.

• Clients are neutrally positioned, awaiting clear directional cues.

Simple Trading Rules for Consistent Success – Master the Market

As Discussed in Last Analysis

Nifty rallied sharply to break above the previous swing high of 23,868 and closed comfortably above the psychological 24,000 mark, in line with our previous analysis based on Gann geometry and astro timing.

Since April 15, when Venus turned direct, Nifty has gained nearly 900 points, reinforcing the power of combining Price, Time, and Event. When these elements align, markets often witness explosive directional moves.

Key Astro & Gann Triggers Ahead

• Mars and Sun Sign Change this week → Known to bring sharp trend shifts in financial markets.

• Bayer Rule 27:
  “Big tops and big major bottoms are formed when Mercury’s speed in Geocentric longitude is 59 minutes or 1°58′.”
  This rule is now active, and historically signals high-probability reversal zones.

Nifty Levels to Watch (April 21 Range)

• High: 24,190

• Low: 23,903

Break of either side could result in a move of 225 to 343 points, giving us projected targets of:

• Upside: 24,415 – 24,533

• Downside: 23,678 – 23,560

Stay alert for a range breakout, which may define the next trending leg for the index.

Global Sentiment Overview

• US markets remain weak, but Asian markets — particularly India — continue to hold firm.

• Watch the Dollar Index (DXY) closely:
  A reversal from the 96–97 zone could trigger risk-off sentiment and a correction in emerging markets, including India.

Final Trading Strategy

• ✅ Focus on key price levels, Gann time cycles, and confirmation from intraday price action.

• ❌ Avoid emotional trading or reacting to global noise without structure.

• In fast-moving markets, execution and exit discipline matter more than prediction.

️️ Condolences

We are deeply saddened by the tragic loss of innocent lives in the act of terrorism in Pahalgam. Our heartfelt prayers and thoughts are with the families affected during this difficult time.

Nifty has now completed a 9-session winning streak, with today marking the 10th day. If we see another gap-up open, it would be the 5th in a row, raising the likelihood of an exhaustion gap, particularly in the context of macroeconomic uncertainty and technical overextension.

Key Risk Factors to Monitor

1. Exhaustion Gap:
   Repeated gap-ups without meaningful consolidation can often precede sharp intraday reversals or profit-booking phases.

2. US–China Trade Dynamics:
   Reports of a potential deal could boost the Dollar Index (DXY). A rising dollar often leads to capital outflows from emerging markets, including India.

3. Earnings Season:
   Corporate results so far have been mixed to disappointing. Once the momentum trade fades, lackluster earnings could drag sentiment lower.

Key Technical Levels to Watch

• Resistance: 24,389
  → Failure to break and hold above this level after a gap-up could trigger profit-booking and short-term weakness.

• Support: 24,051
  → A breakdown here could push the index lower toward the 23,800 – 23,666 zone.

Trading Strategy

• ✅ Use tight stop-losses to protect profits, especially after extended rallies.

• ❌ Avoid chasing gap-ups blindly — wait for price confirmation and intraday structure.

• Partial profit-booking is advisable if holding long positions.

• Be prepared for short setups if a reversal pattern emerges, especially below key support levels.

Nifty Trade Plan for Positional Trade ,Bulls will get active above 24167 for a move towards 24478/24792 Bears will get active below 23857 for a move towards 23549/23243

Traders may watch out for potential intraday reversals at 09:15,10:13,12:13,01:23,02:28 How to Find and Trade Intraday Reversal Times

Nifty April Futures Open Interest Volume stood at 0.88  lakh cr , witnessing liquidation of 2.2 Lakh  contracts. Additionally, the decrease in Cost of Carry implies that there was closure of LONG positions today.

Nifty Advance Decline Ratio at 28:22 and Nifty Rollover Cost is @22900 closed below it.

Nifty Gann Monthly  Trade level :23521 closed above it

Nifty has closed Above its 200 SMA @ 24051 Trend is Buy on Dips till above 24000

Nifty options chain shows that the maximum pain point is at 24200  and the put-call ratio (PCR) is at 1.06 .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 24200 strike, followed by 24300 strikes. On the put side, the highest OI is at the 24000 strike, followed by 23900 strikes. This suggests that the market participants are expecting Nifty 50 to remain range between 24000-24300 levels.

Options Market Snapshot – April 23, 2024

‍♂️ Retail Investor Activity

Call Options:

• Added: 318K contracts

• Shorted: 297K contracts

Put Options:

• Added: 242K contracts

• Shorted: 259K contracts

✅ Interpretation:
Retail participants are evenly distributed on both sides, with only a slight bias toward the long side. This signals a neutral to mildly bullish sentiment, but overall positioning remains cautious, possibly awaiting further confirmation from index moves.

‍ FII Options Activity

Call Options:

• Added: 29K contracts

• Shorted: 41K contracts

Put Options:

• Added: 95K contracts

• Shorted: 107 contracts

✅ Interpretation:
FIIs are showing a modest net bearish bias, particularly through put additions and relatively more call shorting. However, the volumes are not aggressive, suggesting a hedge-based or neutral strategy rather than strong directional conviction.

In the cash segment, Foreign Institutional Investors (FII) bought 1290 Cr  , while Domestic Institutional Investors (DII) sold 885 cr.

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 23037-23722-24408-25134 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. 

We must realize that the market defies logic. It has a logic all its own, and it wonít tell us in advance what its reaction to events will be. We can watch for clues and then react.

For Positional Traders, The Nifty Futures’ Trend Change Level is At 24216 . 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 24175 , Which Acts As An Intraday Trend Change Level.

Nifty Intraday Trading Levels

Buy Above 24331 Tgt 24375, 24412 and 24484 ( Nifty Spot Levels)

Sell Below 24225 Tgt 24200, 24166  and 24108 (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.

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