Market witnessed volatility after News flows on Adani Group

Weekly F&O Data

by 5paisa Research Team Last Updated: Jan 30, 2023 - 06:19 pm 2.3k Views

Nifty50 30.01.23.jpeg

The volatility continued to remain high amidst all the news flows on the Adani Group. The Banking stocks too witnessed a sharp downfall at the start of the week. However, the indices recovered from the lows in the last hour of the trade on Monday and Nifty ended around 16750 with gains of about a quarter of a percent.

Our markets have witnessed increased volatility since last week post the news flows on the Adani group companies. Nifty corrected from the high of around 18200 and almost tested the 17400 mark, in just four trading sessions. Now, post this sharp correction the momentum readings on the lower time frame charts reached the oversold zone and hence, we witnessed a pullback move towards the end. India VIX is trading above 17 levels indicating increase in volatility. Hence, it seems that the market now has light positions ahead of the Union Budget event as the broader markets have corrected sharply in last few sessions. Thus, the event could be a major trigger for the next directional move. The global markets have been doing well recently but the FII’s selling in the Indian markets has been a cause of concern. They have been selling in cash segment and have formed shorts in index futures segment too which has mainly led to our markets underperformance. Their ‘Long Short Ratio’ is around 25 percent only and whether they continue with their negative approach or cover the short positions around the event needs to be seen. In options segment, open interest is scattered ahead of the Budget event wherein high OI is placed at 18000 call and 1700 put options. If we look at the daily chart, Nifty seems to be trading in a falling channel and Nifty has bounced from the support end of the pattern on Monday. On the flipside, the resistance end is around 17750-17800 followed by 17900-18000 range. This seems to be the broad trading range for the Nifty going ahead. 

Hence, post the recent correction, one can look for stock specific buying opportunities on dips as any positive trigger in the budget could lead to an upmove in the near term.  However, one should avoid aggressive/leverage positions till the volatility settles down and trade with a proper momentum management.

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Investment/Trading is subject to market risk, past performance doesn’t guarantee future performance. The risk of trading/investment loss in securities markets can be substantial. Also, the above report is compiled from data available on public platforms.
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