Nifty Spot Closes in Red on Friday: Key Market Insights and Monday Strategy
On Friday, the Nifty spot closed in red at 23,092.2, marking a decline of 113.15 points (-0.49%). The day witnessed significant volatility, reflecting the ongoing tug-of-war between bullish and bearish sentiments in the market. During the morning session, Nifty managed to achieve the upward target of 23,330, which was forecasted by our team after breaching the level of 23,230. The index hit an intraday high of 23,347.30 before reversing its trajectory.
As the day progressed, bearish pressure gained momentum, causing Nifty to slip to an intraday low of 23,050. This downward move successfully met our short-call target of 23,070, which was recommended for trades below the 23,180 level. Consequently, our pre-defined long and short targets for Friday were both achieved, showcasing the precision of our market analysis.
Monday’s Strategy: Navigating Key Levels
For the upcoming session on Monday, we have identified critical levels for Nifty spot trading. Based on our analysis:
Shorting Opportunity: If Nifty spot falls below 23,040, traders can consider initiating short positions with a downside target of 22,840. A stop loss should be placed at 23,095 to manage risk.
Long Opportunity: On the contrary, if Nifty moves above the 23,160 level, a long position can be considered. The upside target in this scenario is 23,320, with a stop loss of 23,110.
This dual approach provides traders with flexibility to adapt to market conditions and capitalize on both upward and downward movements.
FII and DII Activity: A Mixed Bag on friday
Institutional activity on Friday showcased contrasting trends. Domestic Institutional Investors (DIIs) were net buyers, infusing ₹2,402.31 crore** into the market. Conversely, Foreign Institutional Investors (FIIs) emerged as net sellers, withdrawing ₹2,758.49 crore**. This divergence highlights the differing perspectives between domestic and foreign market participants, adding a layer of complexity to market dynamics.
Options Data Insights
An analysis of the options data reveals crucial levels of interest:
Put Side: Strong open interest is visible at the 22,800 strike price, indicating a robust support level.
Call Side: Significant open interest is concentrated at the 23,200 strike price, suggesting a potential resistance level.
These open interest levels can act as key reference points for traders, providing guidance on potential market directions and helping to identify zones of high activity.
Broader Market Sentiment
The broader market sentiment remains cautious as traders assess global cues, economic data releases, and corporate earnings. The volatility seen on Friday underscores the importance of adhering to technical levels and maintaining disciplined trading strategies. With FIIs continuing their selling spree and DIIs stepping in to absorb the selling pressure, the market’s trajectory will likely hinge on global macroeconomic trends and domestic policy developments.
Trading Tips for Monday
1. Risk Management: Stick to the defined stop-loss levels to minimize potential losses.
2. Volume Analysis: Monitor trading volumes for confirmation of price movements.
3. Global Cues: Keep an eye on global markets, including the U.S. and Asian indices, for any spillover effects.
4. Sectoral Trends: Focus on sectoral indices and identify outperforming sectors for potential trading opportunities.
*Disclaimer
This analysis is for informational purposes only and should not be considered as investment advice. Trading in financial markets involves significant risk, and past performance is not indicative of future results. Always consult with a certified financial advisor before making any investment or trading decisions. The author and publication accept no liability for any losses incurred as a result of reliance on this information.