Market Analysis for May 10, 2022

Post Market Report & Nifty Chart Analysis

1. Today we witnessed a gap down of almost 200 points. But, the Nifty Futures came back up to close the gap and then again fell by 100 points to close at 16308. Price started trading above the open price at 11:30 AM and from then, the price was mostly above the open. So, the Bulls regained control in the Intraday Timeframe from the Bears midday.

   

   Nifty Futures - 5 min Chart - Today’s price action

2. But, in the higher timeframes, the Bears are still in control. Today we witnessed a bounce from the 16150 zone that we had mentioned yesterday as one of the support zones. However, as long as the price closes below 16448 in the daily chart, we would avoid bullish trades.

   

   Nifty Futures - 1 Day Chart

3. India VIX has now reached 22 levels. Today it was up by almost 4%. For the past few days, it has been moving between 19 to 21. Today it has breached 21.

4. Nifty Futures is trading at a very low premium. Banknifty too. The confidence isn’t there yet.

5. Almost all sectors ended in red today except IT. IT Index was saved by Infosys.

   

6. Reliance alone was responsible for 75 point fall in Nifty today. It has fallen from 2850 to 2508 in 6 days.

7. FIIs sold for ₹3361 Crores and DIIs bought for ₹3077 Crores in the Cash market. FIIs have so far sold for ₹16000 Crores in May. Staying true to the saying “Sell in May and Go Away”.

8. FIIs have slightly reduced their short positions on the Index today. But still heavily short on the Index.

9. Specifically, I avoid longs when FIIs are carrying huge short positions in Index Futures.

10. The US market is in deep-red now. Most markets have closed in red. Bearish.

    

11. With respect to Nifty open interest of current week expiry, PUTs were added at 16000 and CALLs were added at 16500. So, market participants are expecting Nifty to trade between the two levels in this expiry.

Let’s now move on to the charts & price action.

Positional Trading Analysis for this week (May 09 to 13, 2022)

• Bearish as long as Nifty Futures closes below 16448 in the Daily Chart. Support on the downside being 16354, 16234, 16159 (Marked in Green).

• Bullish only if the Nifty Futures closes above 16647 in the Daily Chart. Resistance on the upside being 16844, 16982, 17095 . (Marked in Red).

• We will maintain a Neutral view if Nifty Futures trades between 16448 & 16647 (between the Blue levels).

The above analysis is for Positional Trading (1 Day Chart) and for this week only. For Intraday Analysis (5 minutes Chart) of Nifty, Banknifty & Stocks, and other useful tools, please check the Finvezto Toolkit. Toolkit enables independent research and helps you make wise trading & investing decisions.

Disclaimer: The analysis is for educational & informational purposes only. Please consult your financial advisor before taking any trading/investing decisions.