Follow-up for the Bullish Candle? Share Market Today

News Shots

Future Retail failed to pay Rs. 3,494.56 crore to consortium banks and lenders under the One Time Resolution agreement. The amount was due on Dec. 31.

Tata Teleservices changed its decision to convert AGR-related interest into equity. Following communication with the Department of Telecommunication has informed the company that the NPV of the interest which is eligible for conversion into equity is only Rs.195.22 crore as against the company’s calculation of Rs.850 crore. Therefore, the company has now opted for a deferment of 4 years.

PNB Housing chairman CH S.S. Mallikarjuna Rao has resigned consequent to completion of his tenure as MD & CEO.

BPCL approved the proposal for evaluating the option of putting up a Polypropylene unit at Kochi Refinery and discontinuing the Polyols project due to revised cost estimates being higher than the original estimate.

Dalmia Bharat added its ground-mounted solar power plant capacity to 17.1MW (from 2.4MW in 2014), in Cuttack, Odisha.

Adani Ports reported that their net profits went down by 1% QoQ.

Tech Mahindra reported that their net profits went up by 2% QoQ.

Earnings today: HDFC, Titan, Tata Consumer Products

What to expect?

NIFTY opened the day with a huge gap-up at 17,535 and moved up overcoming selling pressure. 17,600 offered strong resistance and the index moved down to 17,450. The second time 17,600 was tested, the level pushed NIFTY to even below 17,250. The index recovered with strength and closed the day at 17,577 up 237 points or 1.37%.

BANK NIFTY opened with a gap-up at 38,495 and moved up. There was a previous swing high at around 38,800 and the level resisted BNF. Triple-top was formed and once the neckline was broken, the index fell and after a short-lived bounce, fell again to take support at 37,700. The index climbed in the second half to end the day at 38,506, up 530 points or 1.40%.

All the major sectoral indices closed in the green except for NIFTY AUTO (0.75%) led by Tata Motors.

The US markets and the European markets moved higher yesterday.

The major Asian markets are on the New Year holidays. NIKKEI is trading well in the green. The U.S. Futures and the European futures are in the green now with Dow Futures flat.

SGX NIFTY is trading at 17,725 indicating another gap-up opening in NIFTY.

NIFTY has supports at 17,500, 17,430, 17,380, 17,280 and 17,250. We can expect resistances at 17,610, 17,650, 17,700, 17,770, 17,820 and 17,880.

BANK NIFTY has supports at 38,400, 38,350, 38,100 and 38,000. Resistances are at 38,620, 38,800, 39,000 and 39,200.

NIFTY has the highest call OI build-up at 18,000.

The highest put OI build-up is at 17,000.

BANK NIFTY has the highest call OI build-up at 40,000 and the highest put OI build-up at 38,000.

INDIA VIX is at 19.98.

Foreign Institutional Investors net sold shares worth just Rs 22 crores. Domestic Institutional Investors net bought shares worth Rs 1,598 crores.

The Budget day was a thrilling day for traders, with volatile moves. As mentioned in yesterday’s report, IV was a key factor and the IV crash started a few minutes after the budget session began. Many option sellers among you might have been able to make use of the decay and certainly, the option buyers enjoyed the fall and recovery.

BANK NIFTY was slowly building a bullish momentum in the daily chart. The recent swing high resisted further up-move and thus bulls got confused. This was the first negation to the bullishness. This was confirmed by the intraday price action. Triple-top formation is never a good signal and bears came in as soon as the neckline was broken. Both BANK NIFTY and NIFTY saw huge falls, followed by recovery. Such quick moves are quite challenging for traders.

Budget 2022 was a blow for the Crypto world with the government bringing 30% taxation with retrospective effect. The government will also come up with a digital currency. Capital expenditure is raised from Ra 4.5 Trillion to Rs 7.5 Trillion. Gatishakti will focus on expanding National Highway by 25,000 km. 5G auction also was in focus.

The Manufacturing PMI was out, and it is a 4-month low, at 54. The auto sales data also were released yesterday and Maruti and Bajaj Auto saw a marginal rise. With the below-average results in Tata Motors, there was negativity in the Auto sector and it was the only sector that moved down yesterday. Note that the government bonds in India have hit the peak in two and half years as there are plans to issue a record number of bonds in the next financial year.

Let us see how the follow-up candle in the daily chart of NIFTY works. I will be closely watching the resistance at 38,800-38,860 in BANK NIFTY. If that level is skipped, I will watch 39,200.