Trade Setup For Tuesday: SGX Nifty, Other Things To Know Ahead Of The Trading Opening Bell Today

Trade setup for Tuesday: Driven by weakness in global indices, the Indian stock market experienced a sharp correction on Monday and ended in negative territory. NSE Nifty lost 246 points and closed at 17,312, BSE Sensex fell 861 points and ended at 57,972 while the Nifty Bank index fell 710 points and ended at 38,276. Among the sectors, oil and gas and consumer staples ended up slightly while the information technology, banking, metals and real estate indices fell the most. The mid-cap and small-cap indices fell 0.57% and 0.8% respectively, although the advance-to-decline ratio was negative at 0.53:1.

Here we list the key things to know ahead of the opening bell of trading today:

Global market signals

On Wall Street, US stocks continue to trade lower on expectation of an interest rate hike from the US Fed after the Jackson Hole Symposium. The Dow Jones fell 0.57%, the Nasdaq corrected 1.02%, the S&P 500 fell 0.67% while the Small Cap 2000 lost 0.70% on Monday. The CBOE Volatility Index, Wall Street’s gauge of fear, hit a seven-week high on Monday morning – up 7.4 points to 27.46, on rising risk of more aggressive rate hikes from the Federal Reserve and the European Central Bank.

“Global equities fell, Treasury yields climbed and global currencies lost ground against the dollar on Monday as investors spooked following hawkish comments from some of the world’s most powerful central banks. Isabel Schnabel, a member of the board of the European Central Bank, warned over the weekend that central banks must now act forcefully to fight inflation, even if it drags their economies into recession. said Deepak Jasani, head of retail research at HDFC Securities.

Clever technical insights

“On the daily chart, the Nifty 50 index has formed a bullish candle. However, it continues to move in a lower high-low formation, indicating a negative bias. The index is moving in a Lower Top and Lower Bottom formation on the daily chart, indicating a negative bias The chart pattern suggests that if the Nifty index breaks through and holds above the 17,400 level, it would witness a buy, driving the index towards the 17,500 levels at 17,600. However, if the index breaks below the 17,200 level, it would witness a buying and selling, which would take the index towards 17,100-17,000,” said Rajesh Palviya, VP – Research technical and derivative at Axis Securities.

Rajesh Palviya from Axis Securities added that Nifty is trading below the 20-day SMA, indicating a negative bias in the short to medium term. Nifty continues to remain in a short-term uptrend, so buying on the dips continues to be our preferred strategy.

“The RSI Daily Strength Indicator has turned negative from overbought territory and is below its baseline, indicating profit booking,” Rajesh Palviya said.

Nifty Bank Technical Outlook

“On the daily chart, the Nifty Bank Index has formed a bullish candle. However, it continues to form a lower high-low, compared to the negative bias from the previous session. The index is moving in a lower upper and lower formation lower on the daily chart, indicating a negative bias.The chart pattern suggests that if Bank Nifty breaks through and holds above the 38400 level, it would witness buying, driving the index towards the 38600-38800 levels. if the index breaks below the 38200 level, it would see a sell off, which would take the index towards 38000-37800,” Rajesh Palviya said. He went on to add that Bank Nifty is trading below the 20-day SMAs, indicating a short-term negative bias. Bank Nifty remains in a short-term uptrend, so buying on the downside remains our preferred strategy.

Smart call data

According to data presented by nseindia.com as of 3:30 p.m. on August 29, major total open interest for calls was seen at 17,400, 17,500 and 17,700 strikes with total open interest of 77,293, 161,271 and 168,722 contracts respectively. Adding open interest on the major call was seen at 17,400 and 17,500 strikes, which added 72,308 and 124,835 contracts respectively. No major call outs were seen in strikes ranging from 17000 to 17600.

Smart Put Data

Total Put open interest was seen at 17300 and 17200 strikes with total open interest of 159478 and 145586 contracts respectively. The major addition of open put interests was seen at 17300 and 17200 strikes, which added 103781 and 73212 contracts respectively. The unfolding of the put was observed at 17500 and 17600 strikes which lost 34959 and 35820.

Bank Nifty Call Option Data

According to data presented by nseindia.com as of 3:30 p.m. on August 29, total open interest in major calls was seen at 38,400 and 38,500 strikes with total open interest of 47,864 and 102,777 contracts respectively. Adding open interest on the major call was seen at 38,400, 38,500, and 39,000 strikes, which added 46,619, 89,617, and 60,357 contracts respectively. No major call unwinding was seen in strikes ranging from 37900 to 38700.

Bank Nifty Put Option Data

Total put open interest was seen at 38200 and 38000 strikes with total open interest of 71949 and 140482 contracts respectively. The major addition of open put interests was seen at 38,200 and 38,000 strikes, which added 47,352 and 83,905 contracts respectively. No major unwinding of the put option was seen at the 38600 strike which lost 4749 contracts.

FII DII Data

Foreign institutional investors (IFIs) sold 561.22 crores of shares, as domestic institutional investors (DII) bought net 144.08 crore shares on August 29, according to preliminary data available on the NSE.

NSE F&O Ban List

The National Stock Exchange (NSE) has added void stocks to its F&O banned list for the August 30, 2022 trading date. Blackout stocks in the F&O segment include companies in which the stock has exceeded 95% of the market-wide position limit. .

U.S. bond yield

The US 10-year bond yield is down 0.67% at 3.089 while the US 30-year bond yield is down 0.53% at 3.230.

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