Fall Due To Uncertainty Or Price Action? Trend-Deciding Expiry - Pre Market Analysis

Here are some of the major updates that could move the markets today:

Stocks

Adani Ports and SEZ handled 25.1 million tonne cargo in December, witnessing a growth of 8% YoY. For the 9 months ended December, the Adani Group firm saw 8% on year growth in cargo volumes to 253 million tonne.

Bajaj Finance has booked 7.8 million new loans in the quarter ended December, compared with 7.4 million a year ago, according to provisional figures.

Bharti Airtel will allot 8.35 million shares on conversion of dollar-denominated bonds due in 2025. The bonds can be converted into fully paid-up equity shares of 5 rupees each by February 7, 2025.

Marico expects to post low single-digit YoY growth in the consolidated revenue for the December quarter. It expects gross and operating margins to improve both YoY and sequentially, but operating profit could see a moderate growth.

Tata Motors production in the December quarter rose 12% YoY to 2,21,416 units due to strong domestic demand.

What to Expect Today?

NIFTY opened flat at 18,238 yesterday. The index had a downtrending day. The attempts to move up were sold. NIFTY closed at 18,043, down by 190 points or 1.04%.

BANK NIFTY opened flat at 43,455 and had a heavy fall. A sharp resistance at 43,160 led to further fall. The index closed at 42,959, down by 466 points or 1.07%.

IT moved down by 1%.

The US markets and the European markets moved higher.

The Asian markets also are trading higher.

The U.S. Futures and European futures are trading in the red.

SGX NIFTY is trading at 18,140 indicating a gap-up opening.

NIFTY has supports at 18,000, 17,970, 17,900 and 17,800. We can expect resistances at 18,060, 18,130, 18,170 and 18,260.

BANK NIFTY has supports at 42,940, 42,825, 42,700 and 42,500. Resistances are at 43,000, 43,170, 43,300 and 43,500.

NIFTY has the highest call OI build-up at 18,200. The highest put OI build-up is at 18,000.

BANK NIFTY has the highest call OI build-up at 43,500. The highest put OI build-up is at 43,000.

INDIA VIX spiked to 15.2.

Foreign Institutional Investors net-sold shares worth Rs 2600 crores. Domestic Institutional Investors net-bought shares worth 800 crores.

It was a surprising fall we had. The day-chart was looking good in structure with just one intermittent red candle during the up-move after the support at 17,800. The whole structure has been ruined by yesterday’s fall. Was the up-move just a pull-back for the fall that started on 1st December?

Fed minutes were released yesterday night. There was little reference to what the exact magnitude of hike would be. This makes the situation uncertain However, we can assume that it would be a 25 basis points hike as the minutes said that they wanted slower pace in hikes. However, the Fed also said that they are not to give up the fight against rising inflation.

18,000 should be protected for the bulls to stay in the game. Put addition at 18,000 has been big since the beginning of the week. If a break happens, it can be short covering on the downside. 

The zone of 17,800-18,260 can be considered a consolidation zone with volatility. Let us see who wins the game.

Bank Nifty has crossed 43K on the downside. However, the index is staying just below the level. The expiry day will be a close fight. 

If it was uncertainty ahead of the Fed minutes that led to the fall, then our markets should be able to move up, erasing much of the losses. But if the ball is in the court of bears, it would be the beginning of another impulsive move in the trend that began on 1st December. 

Looking at the global markets, we can expect strength in our market today. However, it is a volatile week and we will have to trade according to the confirmation from price action.

I will watch 18,000 on the downside and 18,130 on the upside in NIFTY for major moves.

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