Generally it has been seen that Indian stock market preempts world stock markets fall and same was seen during Lehman crisis. To be on safe side trade intraday using our bank nifty option tips every day.
We may see a reversal or relief rally today. The important point is it can be in 2 or more parts. "Stock market behaves like human nature". So, it's possible that the 1st upmove may not be bought, hence we may see multiple smaller moves. The message from the markets is clear DO NOT BUY. What you are seeing in banks globally is a contagion effect in small and mid size banks.
USFED - Last week it was 50 basis point increase, hence the sell-off, now Fed futures suggest 25 basis point increase or no increase at all. Mark my words, if you do not get an increase in rates on March 22nd, then we may see a sharp suckers rally which would turn all the bears into Bulls. The long term effects would be really bad if it happens. If FED increases rates, it will put more pressure on the banking sector bonds putting more banks in line for default.
Nifty. 17400 is the intermediate top for the day and the week. It should not break and close above it, else short bets are over. Downside is open, and we may again see levels of 16900 in coming days. Longs stuck st higher prices will exit to limit their losses pushing the markets lower. Hence, we may see another trend day in coming days.
BankNifty. The index is in li e of fire. It should hold 39480 else we may see 38578 by end of weekly expiry. Resistance is placed at 40400.
Derivative.
The build up is heavily on the short side. Another important data point is - In all previous attempts to break previous lows, short side data has more and more conviction. So, the possibility of a lower trend day in coming days cannot be ruled out.
Do not buy or avoid large volume
Derivatives Data Update
Nifty March futures ended at 17,220 a discount of 232.55 points.
Nifty March futures rose 0.63% and 1,462 shares in Open Interest.
Nifty Bank March futures ended at 39,775 a discount of 839.50 points.
Nifty Bank March futures rose 13.22% and 12,262 shares in Open Interest.
Securities added to the ban period: Gujarat Narmada Valley Fertilizers and Chemicals Securities removed from the ban period
