How to trade Nifty after Budget Hangover?

By | July 11, 2014

FII_1

  • FII’s sold 6.8 K contract of Index Future worth 257 cores, 782 Long contract were squared off and 6 K short contracts were added  by FII’s. Net Open Interest came up by 5.2 K contract suggesting FII are again going short at higher level.
  • What a day it was Swing of 252 points, but it do not tell the whole story, Nifty moved down -140 points, Jumped to + 150 and again moved down -80 closing almost neutral. As discussed yesterday Big move can be expected as per time analysis between 1-2:30 PM so trade cautiously during this time.
    As i always mentioned reading Higher time frame will always benefit traders, Traders who followed TC levels would have made handsome amount of money yesterday. Nifty has corrected 330 points from 7809, Maximum correction in recent time we have seen is 434 points so still pain is left in system.  we have discussed 2 Elliot Wave target Bullish and bearish, Bullish target comes @ 7843 and bearish one @ 7394 as discussed in below chart.

Nifty Hourly EW

As seen in below chart the downward falling trendline can also offer good support near 7510 odd levels. If not broken we can see rise again towards 7800 odd levels.If broken 7394 is on cards.

nifty hourly

  • Nifty Future July Open Interest Volume is at 1.36 cores . As discussed An important point to not is 1 core of Index Futures got rollovered in range of 7616-7500 and Nifty is trading well above this zone, this price zone implies a very significant price band.Yesterday we bounced from 7479,
  • Total Future & Option trading volume was highest ever  at 4.41 lakh core with total contract traded at 6.47 lakh. PCR @0.80.
  • 8000 CE  OI at 99.1 lakh saw addition of 11.3 lakh suggesting call writing , 7800 and 7700 CE saw addition of 10.2 lakh suggesting bears have made wall of resistance around these levels, If market rises to 7700 and no call liquidation it will mean bull trap and will start falling after 1 PM so keep close eye on 7700/7800 CE OI to get further indication again it gave a clue of impending fall FII’s sold 9.2 K CE longs and 471  CE were shorted by them.As said yesterday FII’s have been consistently writing calls suggesting higher levels if they come will not be sustained and today again they booked out in calls suggesting they are entering market with bearish bias.
  • 7500 PE OI at 49.9  lakh saw addition of 2.4  lakh so support of 7500 looks dicey , 7600 PE also liquidated 5.5 lakhs  suggesting  7600 can become short term resistance of market  , 7400 0 PE added 6.1 lakh suggesting informed buying happening at this strike. FII’s bought 4  K PE longs and  9K  PE were written by them. 
  • FIIs bought 161 cores in Equity and DII bought 4.89 cores in cash segment.INR closed at 60.17.

 

Buy above 7596 Tgt 7639,7694 and 7737 (Nifty Spot Levels)

Sell below 7541 Tgt 7497, 7442 and 7394 (Nifty Spot Levels)

 

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