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Market Technically




DIIS continue to hold on to their long positions in Index Calls and there is no sale happening. FIIS continue to sell heavily though the sell off yesterday was huge. FIIS were buyers till the last month . Their buying was between the Nifty Futures levels of 5600 and 6200 and the average US/INR rate was 54 at the time of their buying. Now the Re stands at around 60 which means a depreciation in the equity value of around 10 %. NF now stands at 5640 . So assuming that their average buying was at average of of 5900 NF, there is another loss of 5 %. 

So roughly the FIIS have lost 15 % of their investments made last month. And that too when they have sold just 3500 crores of their investments out of around 30000 crores they made just last month. I hope better sense prevails.
5600 and 5700 puts continue to have largest build up till today and barring some weak bears quitting, there is no panic among the bulls yet. Rather more shorts have added into the system yesterday. FIIS shorted heavily in the Index Futures and all of its was bought by investors who are no so organized. Commodities have started falling and that benefits India exchequers . Specially in the context of the fall in the Gold and Crude prices. FIIS were seen shorting in the 5600 and 5700 puts as per my volume analysis yesterday. They have bought Calls in the july series as well. But it is not a very major buy. Nonetheless, it indicates that they themselves do not want to see the market below 5600. 


Technically, The DPO daily charts on long term parameters are in BUY mode. HOurly charts are still in SELL mode. So practically speaking, despite the fear caused in the last two days, i do not see the markets much down from here. However, 5640 to 5650 NF is the support level on the weekly bullish trendline and no long position should be built up till the Futures recross above 5640 . Many significant buying indications have been left behind at 5830 to 6060 levels which , in the normal circumstances, never ditch the market. But having said that, the scenario is not so normal so a confirmation will be made when the NF reenters 5640 and then crosses 5700 again. 
For today, the market has a support at 5583 and below that the next support is at 5385 NF only. We hope that this support is not broken today. On the higher side, the market has the potential to reach NF 5805 on a very fast note if 5640 is crossed. 


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