This is expiry week Tuesday. Expiry week Tuesdays are big. They normally have a momentum move for the market, which doesn’t look like it is going to happen first thing in the morning and as the SGX Nifty is indicating, it is down about 20-25 points not to say that the market will be down today -- it could be down but not that it will be down. The move could be on the upside as well today. It is a momentum day on Tuesday.
Two things could happen today, one is that there could be a lot of short covering because the market is extremely sold out or two, the momentum if the first half is extremely negative, this keeps taking market down. We won’t have a flat day today, let us put it that way. It is going to be a one big move for the market in either direction and markers for me are very clear. If the Nifty breaks 8,500, which is where the highest Put open interest (OI) is also there and which also coincides with 100 day moving average (DMA), in that case there could be a bit of panic and the market could be headed lower. If on the other hand, the Nifty somehow maintains in the green 8,550 or thereabout then it can make a move towards 8,600 as well.
However, what is important is that the Bank Nifty is extremely oversold. If the Nifty sees a bit of a bounce, the Bank Nifty could lead it because it is heavily short and if the market goes down, the Bank Nifty is again likely to lead it because it is technically very weak.
If you see 18,500 was the mark that I was watching out for and if now it breaks 18,300, it will have a bit of a free fall. So if the Bank Nifty has to bounce, it has to bounce now otherwise there is a quite a bit of selling, which is there for the Bank Nifty.
Foreign institutional investor (FII) and domestic institutional investor (DII) numbers are not making too much sense because FII buying was there but the volumes were low, the DII buying was there, the volumes were high, there is a March ending factor as well. So let us not just get carried away by that data.
Suffice to say that at lower levels there is institutional buying which is supporting individual stocks but that does not mean that the market has bottomed out. This is a market which is in a mood to correct a bit more maybe complete 10 percent correction and then move on but it will be interesting to see what happens today because as I said, expiry week Tuesdays are normally big days.
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