Confusing Global Cues; Does BANK NIFTY Have the Strength to Cross 40K Today? Share Market Today

News Shots

PNB received a communication from HSBC Insurance Holdings regarding its intention to buy PNB’s stake in Canara HSBC OBC Life Insurance.

Gokul Agro is setting up a Refinery Unit at Krishnapatnam, Andhra Pradesh with a proposed capacity of 1400 TPD. The proposed investment for the unit is Rs 200 crore.

Max Ventures completed the transfer of 1, 71,89,601 shares constituting 41% of the share capital of its subsidiary Max Specialty Films to Toppan Inc.

Bharat Dynamics signed a contract with the Indian Army for the manufacture and supply of Konkurs – M AntiTank Guided Missiles to the Indian Army worth Rs 3,131.82 crore.

Indian Bank revised its Marginal Cost of Funds Based Lending Rates by 0.05%

CAMS launched Insta Purchase to enhance the service experience of investors in liquid and overnight scheme categories.

Tata Consumer Products reported that their net profits went up by 21% QoQ.

Major Earnings today: ITC

What to expect?

NIFTY opened the day with a huge gap-up at 17,708. There was a strong fight because of the gap-up. Taking support at day-low, NIFTY moved up slowly. The index consolidated after the up-move with support at 17,740. NIFTY closed the day at 17,780, up 203 points or 1.16%.

BANK NIFTY opened with a gap-up at 38,752 and broke 38,850 in the opening candle itself. The index tested 39,150 multiple times and finally broke the level. After consolidating for a while, the sector moved up and closed the day at 39,331, up 825 points or 2.14%.

All the major sectoral indices moved up.

The US markets closed well in the green yesterday. The European markets were mixed yesterday with DAX opening with a gap-up and moving down to close the day flat.

NIKKEI is trading in the red and KOSPI opening after holidays is trading well in the green. The U.S. Futures are trading in the red now with NASDAQ futures falling heavily. The European futures are mixed with DAX futures trading slightly in the green.

SGX NIFTY is trading at 17,789. All the factors together indicate a muted opening.

NIFTY has supports at 17,770, 17,740, 17,700, 17,760, 17,650 and 17,610. We can expect resistances at 17,790, 17,820, 17,880, 17,950, 18,000 and 18,050.

BANK NIFTY has supports at 39,120, 39,000, 38,850, 38,800 and 38,650. Resistances are at 39,400, 39,500, 39,780, 40,000 and 40,150.

NIFTY has the highest call OI build-up at 18,000. There is very good put build-up. Though the highest is at 17,200, there is heavy build-up at 17,700, 17,600 and 17,500.

BANK NIFTY has the highest call OI build-up at 40,000 and the highest put OI build-up at 39,000.

INDIA VIX cooled off by 6.6% to 18.65.

Foreign Institutional Investors net sold shares worth just Rs 184 crores. Domestic Institutional Investors net bought shares worth Rs 426 crores.

You would be confused looking at the global cues. It was a good rally in the US markets for the last few days including yesterday. But NASDAQ futures are deep in the red now because of the Facebook results which were way below the standards. Dow Futures are only 0.1% down. Looking at Asian markets, China and Hong Kong remain shut for New Year holidays but KOSPI has opened today and is trading more than 2% in the green. NIKKEI also will confuse you as it is 1% down. But it has been a very good up-move the previous day and it is now trading in the gap trying to recover.

Crude oil prices stabilised after dropping from the peak as OPEC+ decided to boost output from March. However, it will be hard for certain members to meet the growing demand.

The US markets are slowly beating the negativity brought by FED interest rate decision with the help of good corporate results overall. But yes, some giants disappointed. More than 80% of the stocks in S&P 500 have met or beaten the expectations.

The open interest data indicates bullishness. If you look at BANK NIFTY, there has been a good put OI addition at 39,000. Make sure that you combine OI analysis with price action to enter trades.

BANK NIFTY trapped traders by weird price action in the second half but looking back at the end of the day, it has gained more than 2%. We can expect a follow-up move today or tomorrow. 39,780 has to be watched closely. I will be keeping an eye on 17,880 on the upside in NIFTY. A move below 17,740 indicates weakness that can be confirmed by a close below 17,670 to fill the gap.

FII action will be a major indicator of our market direction in the coming days. Let us watch the heavyweights today: HDFC twins that contributed significantly yesterday and Reliance that has not been able to be a part of the recovery journey.