Reversal or Pause? Pre Market Analysis

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

Stocks

Promoter Abrdn Investment Management will likely sell its entire stake in HDFC AMC through block deals today.

Private equity firm TPG Investments, through its India arm, has sold its entire stake in Shriram Finance through open market transactions on Monday.

Markets regulator SEBI has barred IIFL Securities from onboarding any new client for a period of two years on grounds of breach of code of conduct regulations of stock brokers.

IndiGo said it has placed a firm order for 500 Airbus A320 Family aircraft. This will provide IndiGo a further steady stream of deliveries between 2030 and 2035. 

Timken Singapore will sell about 63 lakh shares in Timken India through block deals

What to Expect Today?

NIFTY opened with a small gap-up at 18,881 and quickly moved down. Support was taken at 18,770 but it was short-lived. NIFTY closed at 18,755, down by 71 points or 0.37%.

BANK NIFTY opened flat at 44,040 and fell. The index moved down more than the general market. 43,680 was broken and BN closed at 43,634, down by 304 points or 0.69%.

IT closed 0.42% in the green.

The US markets remained shut yesterday on account of Juneteenth Day. The European markets closed lower.

The Asian markets are trading lower.

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

SGX NIFTY is trading lower at 18,815.

All the factors combined indicate a flat to gap-down opening.

NIFTY has supports at 18,710, 18,685 and 18,560. We can expect resistances at 18,770, 18,830 and 18,890.

BANK NIFTY has supports at 43,500, 43,430 and 43,265. Resistances are at 43,780, 44,000 and 44,100.

FIN NIFTY has supports at 19,365, 19,320 and 19,240. We can expect resistances at 19,470, 19,500, 19,540 and 19,600.

NIFTY has the highest call OI build-up at 18,800. The highest put OI build-up is at 18,700. PCR is 0.8

BANK NIFTY has the highest call OI build-up at 44,000. The highest put OI build-up also is at 43,500. PCR is 0.8.

FIN NIFTY has the highest call OI build-up at 19,500. The highest put OI build-up is at 19,400. PCR is 0.9.

INDIA VIX  is at 10.8.

Foreign Institutional Investors net-sold shares worth Rs 1,000 crores. Domestic Institutional Investors net-sold shares worth 400 crores.

Both FIIs and DIIs were net sellers yesterday and this is happening after a gap. Do you think the top is done? It would be early to ask this question as there has been a good rally and it is important to give some time for the market to rest and rally.

If there is a reversal from here, note that 18,680 is the first level to watch. It is a major swing point in the day-chart. The corresponding area in BN is 43,430-43,400 zone.

We do not have cues from the US markets as they were shut on account of Juneteenth Day. But the European markets gave us the direction and they were deep in red. As the factors combined is indicating a flat to gap-down opening, initial price action is crucial for bulls.

19,320 is a major level to watch in FIN NIFTY. Since VIX is low, premium may not match the risk taken by Non directional option sellers if they enter aggressive positions.

Looking into the hourly candle itself gives us the picture of volatility in the market. I would suggest Strangle players to reduce quantities in the morning and make changes as the market progresses.

I will watch 18,710 on the downside in NIFTY. 18,770 can be watched on the upside.

Follow us on the marketfeed app’s Signal section to get real-time updates from the market. All the best for the day!