Trade setup for Nifty and Bank Nifty Futures and options for 21st May 2020 based on data of 20th May 2020.

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FII/ DII Cash Data : After 7th May BUY of HUL, FIIs are not convinced in any significant buying. Are DIIs accumulating ? If we see DII data then from 2nd March ( Nifty 11200) to 30th March (Nifty low of 7511 on 23rd March) they hv bought 55 k Crores. In April+May DIIs are net buyers of 1946 Cr including HUL buy on 7th May while FIIs are net sellers of 76k Cr( excluding 17k Cr of HUL). Yesterday, FIIs sold 1467 Cr and DIIs bought 2323 Cr ( highest post HUL BUY on 7th May) . So far, April+May data suggest both FII and DII are non-committal on either Nifty falling more or Nifty recovering big time from here. They are waiting for a clear direction of either side to take a significant BUY/SELL.

FII Derivatives Data : Based on 19th May data of Short 75 k Index Call, yesterday long 1 k Index Call ; Against 19th May 12 k Index Short Put , yesterday added another 7 k short Put ; with 396.07 Cr outflow: Against no outstanding Stock Options positions on 19th May, yesterday added 2 k Long Stock Call Options with inflow of 64.67 Cr; Against Index futures buy of 2331.69 Cr on 19th May added another 216.41 Cr Index Futures on 20th May 2020. Thus FIIs are playing the consolidation of Equity Markets through Derivatives . As 20th May data, LONG through Futures and Put Option but hedged through Call Option.

India VIX & Advance/ Decline : Reading at 39.46 which is same as 19th May reading which shows “fear” increasing, we will look for settlement of reading below all time average of 20 to look for resumption of Capex Activities by companies. Against Advance/ Decline Ratio of 36:14 on 190th May , A/D has increased to 42:8 depicting more strength in Nifty.

Weekly Nifty Option Strike Analysis for 21st May Expiry : Nifty PCR is consistently increasing with 1.18 for yesterday against 1.04 for 19th May. Nifty OI down by 7.7% against price increase of 2.3% showing short covering. PCR at 9000 = moved upto 12.67 from 0.39 of 19th May and 0.3 of 18th May ; PCR at 9050 is 1.02 which shows a BIG TUSSLE at this level. PCR at 9100 has increased to 0.31 against 0.15 on 19th May and 0.22 of 18th May; PCR at 9200 has increased marginally to 0.13 against 0.11 of 19th May and 0.14 of 18th May ; PCR at 8800 has moved up-to 3.38 from 2.41 ; PCR at 8900 has moved up to 1.15 from yesterday’s 0.81. PCR at 8850 = 4.78. Against 19th May situation of Bears trying to strengthen grip at 9100/9200, yesterday 20th May Bulls have tightened grip at 9000 level . Bears are maintaining strong hold at 9200/9300. Bulls have got strong support for next expiry of 28th May at 8850/8800.

For Today 21st May, as per Derivatives Data – Any Pull back towards 9200/9300 will be a SELL opportunity and any SELL-OFF towards 9000 will be a BUY opportunity.

As discussed yesterday 20th May morning, Nifty might react if there is some some very strong “news” is out and discounted in prices – yesterday Special Liquidity Facility for NBFCs and HFCs is approved by Cabinet which led to recovery of Nifty.

Nifty’s today’s view 21st May 2020 :

Yesterday 20th May 2020, Nifty Open = 8889.15 , Low = 8878 , High = 9093, Close = 9066.55

What happened Yesterday : Nifty opened at our Resistance 1 zone of 8880-8895. Made a low of 2 points below our Resistance 1 Zone. Nifty consolidated throughout the day in our Resistance 4 Zone of 8944-8968. Made a day’s high 13 point above our Resistance 4 zone of 9050-9080 which was a make/break level. Closed below our make/break level of 9050-9080.

What might happen today :

SGX Nifty indicates a open of Nifty in RED. “SELL on RISE” preferably at 35 points range of 9195-9230. “BUY on DIPS” at 30 points range of 9015-9045.

Resistance 3 : 30 points range of 9195-9230. Resistance 2 : 30 points range of 9122-9144 Resistance 1 : 30 points range of 9050-9080. Support 1: 30 points range of 9015-9045 Support 2 : 24 point range of 8944-8968. Support 3 : 15 points range of at 8880-8895. 28th May Expiry Support : 10 points range of 8820-8830 .

If nifty breaches Resistance 2 on upside wil be a SELL opportunity with Resistance 3 as STOP LOSS and TARGET of Resistance 1 . 9050-9080 is very strong resistance on upside and 8820-8830 is strong support on downside.