Trade Setup for August 22, 2022: What to Know Before the Market Opening Bell

Trade setup for Monday: After showing consistent bullish moves for eight consecutive sessions, the Indian stock market slipped into a sharp downward reversal on Friday. NSE Nifty plunged 198 points and closed at 17,758 while BSE Sensex fell 651 points and closed at 59,646 levels. The Nifty Bank Index finished 670 points lower at 38,985 points. However, the mid-cap index (-1.3%) fell more than the Nifty. Volumes on the NSE were the highest since April 29, 2022, suggesting aggressive selling after a sustained rise. The anticipated decline ratio reflected bearish sentiments in the market ending at 0.53:1.

Here we list the key factors to be aware of before the stock market opening bell today.

Global market signals

At the end of the relief rally, Wall Street ended in negative territory on Friday. The Dow Jones ended down 0.86% while the Nasdaq slumped more than 2%. The S&P 500 fell 1.29% while the Small Cap 2000 plunged 2.17%. Asian stock markets were trading mixed on Friday after broadly positive signals from global markets overnight, while European markets were slightly higher.

Asian Market Morning Trends

In Monday’s morning trades, Japan’s Nikkei is down 0.63%, Hong Kong’s Hang Seng is up 0.05%, South Korea’s Kospi is down 0.86% while Shanghai’s Chinese quotes 0.26% lower than its Friday close.

SGX Nifty Technical Outlook

In Monday’s morning session, SGX Nifty was down 85 points at 17,658 levels.

“Immediate support for SGX Nifty is placed at 17,480 while its strong support is placed at 17,250 levels. Similarly, the index faces an immediate hurdle at 17,820 while 18,000 is a significant hurdle for the index. Intraday traders can assume a short range for SGX Nifty today between 17,480 and 17,820, while a wider range for SGX Nifty today is between 17,250 and 18,000,” said Vice-Vice Anuj Gupta. -President – Research at IIFL Securities.

Anuj Gupta recommended a “sell up” strategy for today as the market is trading in an overbought zone.

Clever technical insights

“Nifty gained for the fifth consecutive week (up 0.34%) despite Friday’s losses. Friday’s high and low bar engulfed the previous three candles, forming a downtrend. Until Nifty reached to break Friday’s high (17,992), the trend will either be down or sell up, on the downside, first support can come in at 17,725,” said Deepak Jasani, head of trade research at retail at HDFC Securities.

Bank Nifty Technical Outlook

“Immediate support for the Nifty Bank Index is placed at 38,750 while strong support for the Index is placed at 38,600 levels. Similarly, the Bank Index faces an immediate hurdle at 39,800 as the strong hurdle for the index is placed at 39,800 levels,” said Rajesh Bhosale. , technical analyst at Angel One.

Nifty Call Put Data Option

“NIFTY FUT fails to break above 18,000 after which the drop was quite steep. The options chain for monthly expiry suggests that 17,000 PE holds overall maximum exposure if more than 1 lakh contracts, 17,300 PEs adding the highest new contracts of over 38,000. CE writers are active at 18,000 CE now – with over 2 lakh contracts in total and also being the most aggressive strike – adding new contracts of one lakh,” said Shilpa Rout – Senior Derivatives Analyst at Prabhudas Lilladher.

Nifty Call Put ratio

“PCR OI at 17600 strike is well above 2, which if held and increased will give the BULLs basic support,” said Prabhudas Lilladher’s Shilpa Rout.

Nifty Bank Call Put Option Data

“The BANK NIFTY FUT options chain reflects that PE writers are active at 38,000 PEs with over 88,000 total contracts, with immediate strikes witnessing PE OI unfolding. Wide range of trades between 38,000 and 39,800 areas,” Shilpa Rout said.

FII DII Data

Foreign Institutional Investors (IFIs) bought 1,110.9 crore shares, as domestic institutional investors (DIIs) sold off 1,633.21 crores in shares on August 19, according to preliminary data available on the NSE.

Banned by F&O NSE on August 22, 2022

The National Stock Exchange (NSE) has added the shares of Balrampur Chini, Delta Corp and Tata Chemicals to its F&O blacklist for the trading date of August 22, 2022. Blacklisted securities under the F&O segment include companies in which the titer exceeded 95%. of the market-wide position limit.

U.S. bond yield

The US 10-year bond yield was up 0.17% at 2.994 while the US 30-year bond yield was down 0.22% at 3.232.

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