Nifty behaved erratically today (October 16, 2017). Can these be navigated/predicted?

Today was a good day, markets behaved responsibly. The previous day’s chart had closed higher, with the 10 EMA line comfortably above the 50 EMA line. There was a gap up opening on the 13th, and the MACD fast and slow lines were both exhibiting a strong uptrend.

The market participants (FIIs) were bullish

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India VIX was up by 1.99%. Though Nifty is negatively correlated with India VIX, this 1.99% was not enough to influence the markets. SGX Nifty in the morning also exhibited an uptrend.

The only thing that irritated me was that the markets fluctuated like it had wildfire up its ass. The updown moves kept me on my toes. However, all in all Nifty held its levels.

Any comments/opinions from more experienced traders are welcome.

This was due to sharp Nifty rise from the previous session , Bank nifty was weak during the day and also follow through is not happening , time to be cautious , especially on buying or cash side of the market

@utsav
Look at the reduction in FII futures shorts and increase in Longs. they move the market their way and exit with profit at right level.
That is why market moves like that. If you see double bottom intraday take long and exit short at that level.

Nifty is going to 10500

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@utsav check this out, (http://stocksonfire.in/useful-trading-tools/intraday-chatroom-india/), i got this from @haribabu 's profile,i think he chats there. i just joined tonight.

@haribabu So if I got you correctly, they are moving it down, intraday, and picking up stuff at low prices, and then exit by taking the prices up, all within a day! But how does that explain a double bottom. At first when they lower it, its the first bottom, then they raise it to the high, and then when they exit the market falls again. But how can we say that the next upmove is coming. If at the second bottom the big boys have exited, who picks it up for the second time?

They use High Index Weightage stocks Like HDFC, HDFCBANK, INFY, RELIANCE.

see HDFC today. It scared me and I lost 8k. it tested my patience but at the end It bounced back. The take it to the extreme level of either side to clear stop losses so the stop loss triggering will push further in the same direction.

Nifty is in strong Up trend. if you see FII net Long % it is increasing from 50% on Expiry to above 63% today. This is extreme bullish trend. Also their Selling reduced now. Reason is Strong Economic Indicators came in the last ten days.

Economy bottomed out in Q1FY18. so from here on it will go up only.; Inflation is very low. If Modi wins Gujarat then Nifty will go to 15k

@KarthikNarayan wow thats neat! I’m gonna join it too. That is bound to be exciting.

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@haribabu sir do u go by the name Hari in the chat room and how do you get the information on FII holdings?

Yes. FII holding https://trendlyne.com/stock-screeners/shareholding-change/

for daily FNO data https://www.nseindia.com/content/nsccl/fao_participant_oi_16102017.csv

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@haribabu That is quite an observation. I am attaching a pic of the chart for everyone’s reference.

What I didn’t understand is how we are linking it to the double bottom. Let me see if I can follow your method:

Today the market was rising, so the big boys got together, and decided to press it down, HDFC being one of their victims. They pushed the stock down just enough to trigger the stoplosses and the stock went into a free fall. Now, considering its huge market cap, the Nifty should also behave similarly, and it did. When the bigboys were comfortable, they started raising HDFC again, nifty mimicked it and rose, creating the top for the double bottom.

But then what caused the second bottom of the double bottom, let me guess that it was through manipulating some other stock. Now what does the big boys achieve by raising prices for the second time? Why don’t they just let the market languish after they’ve reaped profits post the double bottom?

If you look at their Nifty Options OI they may have ITM options as well in that. So to sqoff them they do it on expiry days in sinusoidal fashion so that they will exit with profits.

Since they know market is going up they will unwind calls and write puts.

if Index is for Hedging only then we need long puts and short futures… no need of long calls.
Hedging also includes for upside moves. for Ex. if FII wanted to invest 1% in a stock that will make stock to go up. he buys stock Future and also Calls and then start buying the Equity. this way he benefits.

When they bought down the HDFC in cash they need to cover up the shorts that will again push the price up. so at that time they buy calls and Futures of stock as well as Nifty Futures. They are getting double benefit one in stock movement and other in index movement. ALL actions of FII on 16th Oct 2017 tells us that They switched to Bullish tone,

Futures : Increased Longs and Reduced Shorts.
Calls : increased Longs and increased shorts. call shorts negligible increase
Puts : reduced longs and increased shorts.

So Market made double bottom. this is similar to Dec 2016 bottom. from here on it will move up. 10100 will become to new support for Nifty henceforth. Like it did with 9000.

Except PCR all factors are positive for Nifty currently. in extreme bullish case PCR may go up to 2.0

Also FII reduced their stack in HDFC in Q2. that why it is moving in sideways for more than one month, Many large Caps they reduced their Stake.

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another example of how FII manipulate our markets is using SGX Nifty.

as per FII data we discussed in this thread, They are strongly bullish. Now SGX is opening negative for no reason. SGC is used only by FII. So this is called predatory trading methods.

This is called fishing. This kind of Fishing is also done using Pre-Open session,.

You could have noticed many times several stocks got sold off at Gap Up and they fall by 2-4%

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