good morning

MARKET SETUP
Global cues positive, India outperforming
Indian market showing decoupling signs on bad days
Market’s texture is now “Buy on dips”
Domestic economy stocks to lead
Crude could be a worry going forward
Weekly expiry today

INSTITUTIONAL DATA
FIIs and DIIs both buy, net buy Rs 2300 cr
Massive short covering by FIIs on Tuesday
FIIs covered 36,000 shorts on Tuesday
FII shorts now down to 92,000 contracts

NIFTY
Base has now moved up to 17,200
Resistance zone would be at 20 DMA of 17,490

BANK NIFTY
Bank Nifty is the firm leader for markets
Base has now moved up to 38,500
Resistance zone at 20 DMA of 39,840

Good morning

MACRO HEADWINDS TODAY
Dollar Index shoots up to 112.1 from 110.3
Dollar-Rupee indicating 82.25 in forward mkt
World Bank cuts India’s growth forecast
Brent crude at 94.5, above 96 will be in bull mkt
If the trend is up, negative news will be bought

TRADE SETUP
FIIs at 20% long and 80% short in Index
Heavy Call build-up at 17,400 and 17,500
Nifty is in a very strong congestion zone
17,400-17,500 is a big resistance level for Nifty
17,472 is the current 20 DMA for Nifty
Bank Nifty may test 50 DMA of 39,045
Below 50 DMA, support comes at 50 DEMA of 38,650
Midcaps to outperform till Nifty above 17,200

Good morning

TRADE SETUP
Big question: Why are FIIs shorting so much?
Index futures: FIIs add 15,000 fresh shorts
FIIs shorts back to near record high of 1.1 lakh
FIIs are 18% long and 82% short on Index
Market’s theme will be centered around FII shorts
Above 17,500 big covering, below 16,800 big decline

NIFTY SETUP
Yesterday’s low of 17,064 first support
16,818 remains most important level on close
17,400-17,500 biggest congestion zone
Close above 17,500 will lead to massive covering
Close below 16,800 will lead to bigger decline

BANK NIFTY SETUP
Bank Nifty turned right from the crucial support
38,500 now most important level to defend on downside
Yesterday’s high of 39,315 will be first resistance
Above 39,315, level to watch is 20 DMA of 39,715

IT: WHAT NEXT?
All IT ADRs up 2-3%
IT stocks may bottom out for now
Biggest positive in TCS is the margin picture
Going forward, US economic data will be crucial
Inflation or recession: What’s going to happen in US?

And now the most important data point

RETAIL VS FII
FIIs at record short, retail at record long
Retail long in Index futures highest at 1.56 lk
Last time this happened was in June
Nifty rallied 15% from June lows
Retail has won 3 out of 3 times vs FIIs in such setup

The big talking point of the day

Good morning

Detailed setup