US debt ceiling crisis is all but resolved resulting in a big gap up and a small rally in global markets. Unfortunately, buying 130 points gap up is highly risky. We have a lot of open positions on the long side and we will be booking some profits in those trades. June is a 5 week expiry, and as history tells us, the range is bigger for the month.
The markets will keep on surprising us with unexpected news and today is no different. The only issue is "BUY ON RUMUOR AND SELL ON NEWS" should not happen. Markets believed on thr outcome, hence the rally in IT stocks.
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#Nifty. We closed at 18499, and gap up shows 160 points. So we open at 18660, and after gap up, support comes in at 18400 and resistance at 18750.
#BankNifty. The tight range will break on the upside but, I will wait to enter. There is no reason to enter now thought the Index should break 45000 soon.
#Derivative. Data is extremely positive. Too much one sided which in itself is.a dangerous sign.
We will be booking profits and will wait for a decent dip to enter.
FII DATA
as on 26/05/2023
(fig in crores) Cash Market
FII Net 350.15
FII Buy 8,203.32
FII Sell 7,853.17
Advisory: India Vix : 11.90
FIIs were net buyers in the cash market segment to the tune of Rs. 350 crores. Simultaneously, in Index futures, they bought worth Rs. 1185 crores with an increase in open interest, indicating long addition. The June month contract started on a very positive note with long addition in both key indices. On the options front, the put writers added a good amount of positions in 18400-18300 strikes, indicating an upward shift in the base. While on the higher end, OI build-up is scattered from 18500-18800 call strikes on an immediate basis. The ‘Long Short Ratio’ has seen a significant surge from 48% to 62% WoW. Considering the above data point, we expect the positive momentum to continue in the index and any dip towards the support is likely to augur well for the bulls in the upcoming week.
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