Market to open gap down on eve of Apple stock going down by 8% in last two trading session. Looks like it was too much for the markets on Friday. The gap down is an opportunity to slowly add some quality stocks.
The overall structure on daily time frame is buy on dips and that is what we should do. SgX is currently 160 points down but I don't think we will open that much below. Anything 100/120 points down should be enough for the day and the week. The stoploss for all long positions is at 16840 on closing basis.Till then nothing got worry.
DERIVATE UPDATES - Nifty
Nifty spot moves up by 1.62% and Futures by 1.59% suggesting some intraday profit booking and short buildup (positional) in Futures. Short unwinding in Nifty calls from 16900 till 17050 suggest short term trend reversal. Any dip is a buying opportunity. VWAP at 17005 and MAX Pain at 17050 is inclined with volatility. Long buildup seen on Friday but net data is still short by 1.22 lac contracts. Important point is OI PCR is at 1.16 and volyme PCR is at 0.85. It means still some more short covering is expected and hence a dip is a buying opportunuty. Net CE OI is at 5.58cr and NET PE OI is at 6.49cr indicates bullishness.
Less long buildup as compared to Nifty buy lot of short covering in Futures as well as options. BN OI is net short at 45264 contracts. No discrepancy in OI and volume data of Bank Nifty. Bank Nifty VWAP is at 38444 and MAX Pain is at 38300.
Conclusion. Clear buy on dips till 16900. Nifty should out perform Bank Nifty. Ist point of reversal is at 17235 and for Bank Nifty is at 39160. Above it is an open road till 17450 on Nifty. High difference between OI PCR and Call OI in Bank Nifty suggest high volatility.
Do not expect a run away week. Volatility in a range is the game till 6th October. Do share your suggestions in the community abt this update.
