Short Market Report 27.01.22
Short Market Report
Market is playing the pull back rally as we had discussed in our last market report. So, what happened today? Huge shorts were built yesterday and those positions were squared off at the start resulting in huge gap down. The indices took another nose dive few mins later and the down move continued till Nifty reached yesterday's low and then bounced back; and my God what a rally that was. Few of the forum members were confident that nifty will reach 15900 levels but I have been saying something for quite sometime. People would buy cow dung if it's available at a discount. That is what we witnessed today. Even though indicators didn't show oversold but RSI was not forming new low and people started building long positions resulting in this massive short covering rally. Call Writers got trapped due to over confidence that rally will not happen. I don't blame them as I have had losing days due to this thought process. As noted previously Bank nifty was stronger than NIfty and PSU banks out performed everything.
Worrying issue is Nifty IT and how much further it can fall. if you are holding IT stocks, continue to hold or keep buying in small quantities like SIP. You can make huge gains in one year's time
All depends on how Nifty will respect the channel bottom along which nifty has been trading since 2020 drop. The last downfall tested the channel bottom once at 16400 and then we had a straight forward rally till 18300. Now for two consecutive days we have tested this channel bottom. I am not expecting a drop before a decent pull back but you should keep in mind that this is likely to happen in near future.
Budget theme has been playing for some time and two sectors you should watch closely are PSU banks and Defence
For tomorrow, gap down is again likely but I am not sure. if gap down happens, will be a small one. Expect some profit booking which may result into a red day. Some veteran analysts are confident that 17500 is coming
Trading Ideas: If rally has to continue, you can go with 17500 CE and 38400 CE. But be very careful as things may turn around very fast due to volatility.
Stocks to Watch for tomorrow
PNB
TATA POWER
IDFC FIRST BANK
NALCO
Market is playing the pull back rally as we had discussed in our last market report. So, what happened today? Huge shorts were built yesterday and those positions were squared off at the start resulting in huge gap down. The indices took another nose dive few mins later and the down move continued till Nifty reached yesterday's low and then bounced back; and my God what a rally that was. Few of the forum members were confident that nifty will reach 15900 levels but I have been saying something for quite sometime. People would buy cow dung if it's available at a discount. That is what we witnessed today. Even though indicators didn't show oversold but RSI was not forming new low and people started building long positions resulting in this massive short covering rally. Call Writers got trapped due to over confidence that rally will not happen. I don't blame them as I have had losing days due to this thought process. As noted previously Bank nifty was stronger than NIfty and PSU banks out performed everything.
Worrying issue is Nifty IT and how much further it can fall. if you are holding IT stocks, continue to hold or keep buying in small quantities like SIP. You can make huge gains in one year's time
All depends on how Nifty will respect the channel bottom along which nifty has been trading since 2020 drop. The last downfall tested the channel bottom once at 16400 and then we had a straight forward rally till 18300. Now for two consecutive days we have tested this channel bottom. I am not expecting a drop before a decent pull back but you should keep in mind that this is likely to happen in near future.
Budget theme has been playing for some time and two sectors you should watch closely are PSU banks and Defence
For tomorrow, gap down is again likely but I am not sure. if gap down happens, will be a small one. Expect some profit booking which may result into a red day. Some veteran analysts are confident that 17500 is coming
Trading Ideas: If rally has to continue, you can go with 17500 CE and 38400 CE. But be very careful as things may turn around very fast due to volatility.
Stocks to Watch for tomorrow
PNB
TATA POWER
IDFC FIRST BANK
NALCO
Penafian
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