Trade setup for Wednesday: Despite mounting tension between the US and China, key indices Sensex and Nifty closed with marginal gains, extending the winning streak for the fifth day. NSE Nifty finished 5 points higher at 17,345 whereas Sensex ended 20 points higher at 58,136 levels. Nifty Bank index surged 120 points and closed at 38,024 mark. Volumes on the NSE were higher than recent averages. Among sectors power & FMCG indices rose the most while realty and IT indices fell the most. Broad market indices like mid-cap and small-cap did better than the Nifty but the advance decline ratio fell to 1.23:1.
Global markets cues
Following the escalating tension between the US and China, Wall Street remained under the sell-off heat throughout the Tuesday session. Dow Jones closed 1.23 per cent south, Nasdaq went off 0.16 per cent, S&P 500 shed 0.67 per cent whereas Small Cap 2000 added 0.18 per cent on Tuesday deals. Dismal manufacturing readings from Asia and Europe have also raised concerns over a potential global recession. European shares fell on Tuesday as weak global factory data fanned economic slowdown fears, while markets were on edge as U.S. House of Representatives Speaker Nancy Pelosi was expected to visit Taiwan.
Asian stock markets (especially Taiwan, China and Hongkong) have been rattled by mounting tensions between the United States and China over US House of Representatives Speaker Nancy Pelosi’s expected visit to Taiwan.
Nifty technical outlook
“Nifty seemed to have halted after 4 days of sharp rise. It may now consolidate/correct minorly before embarking on the next move. 17,173 to 17,390 could be the band for the Nifty in the near term,” said Deepak Jasani, Head of Retail Research, HDFC Securities.
” If we look at the lower time frame charts of Nifty, the momentum set ups are showing a negative divergence as although the index surpassed the previous day’s high, the oscillator has not thus formed a divergence. Also Nifty is trading around the crucial hurdle of 61.8% retracement of the entire corrective phase of last few months. Usually when such divergences in overbought zone coincide around crucial resistance, it should lead to either a time-wise or a price-wise correction in the index in the short term,” said Ruchit Jain, Lead Research at 5paisa.com.
Ruchit Jain went on to add that traders should look to book profits on long positions and look for some correction in the next few days. “The immediate support for Nifty is placed around 17200 below which the index could test 17000 level. On the flipside, 17350-17400 is the immediate resistance zone,” Jain said.
Bank Nifty technical outlook
“Immediate support for Nifty Bank index is placed at 37,600 to 37,700 mark whereas it is facing immediate hurdle at 38,400 to 38,500 levels. So, broader range of Bank Nifty is placed in between 37,600 to 38,500 levels,” said Vaishali Parekh, Vice President — Technical Research at Prabhudas Lilladher.
Nifty Call Option data
As per data shown by nseindia.com at 3.30 pm on 02 August, Maximum total Call open interest was seen at 17400, 17500 and 17600 strikes with total open interest of 105183, 147426 and 116709 contracts respectively. Maximum Call open interest addition was seen at 17400 and 17500 strikes which added 23721 and 21065 contracts respectively. Call unwinding was seen at 17000 and 17100 strikes which shed 5992 and 6392 contracts respectively.
Nifty Put Option data
As per data shown by nseindia.com at 3.30 pm on 02 August, Maximum total Put open interest was seen at 17200, 17100 and 17000 strikes with total open interest of 170169, 102920 and 148594 contracts respectively. Maximum Put open interest addition was seen at 17300 and 17200 strikes which added 27534 and 6799 contracts respectively. No major Put unwinding was seen at strikes ranging from 17000 to 17600.
Nifty Bank Call Option data
As per data shown by nseindia.com at 3.30 pm on 02 August, Maximum total Call open interest was seen at 38200 and 38500 strikes with total open interest of 58807 and 67592 contracts respectively. Maximum Call open interest addition was seen at 38300 and 38500 strikes which added 17002 and 23897 contracts respectively. Call unwinding was seen at 37800 and 37500 strikes which shed 12216 and 13290 contracts respectively.
Nifty Bank Put Option data
As per data shown by nseindia.com at 3.30 pm on 02 August, Maximum total Put open interest was seen at 38000, 37800 and 37500 strikes with total open interest of 94149, 65580 and 88259 contracts respectively. Maximum Put open interest addition was seen at 38000 and 37900 strikes, which added 55612 and 22945 contracts respectively. No major Put unwinding was seen at strikes ranging from 37600 to 38600 strikes.
FII DII data
Foreign institutional investors (FIIs) have net bought ₹825.18 crore worth of shares, whereas domestic institutional investors (DIIs) have net bought 117.79 crore worth of shares on August 2, as per provisional data available on the NSE.
NSE F&O ban on 3rd August 2022
The National Stock Exchange (NSE) has added Escorts stock under its F&O ban list for trade date 3rd August 2022. Securities in the ban period under the F&O segment include companies in which the security has crossed 95 per cent of the market-wide position limit.
US bond yield
US 10 year bond yield is down by 0.13 per cent to 2.737 whereas US 30 year bond yield is up by 0.67 per cent to 3.004.