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Daily Market Analysis 16 Jan 2023 Monday

Market Structure :

Transitioning from Bearish to Bullish, for that need a follow through session closing in positive.

Nifty Analysis :

1. New Week is starting and this week Nifty and Bank Nifty traded in previous week’s range and made a Doji candle in Weekly time frame.
2. That means market closed exactly at the same point on Friday where it opened on Monday.
3. From past 3 Week’s, Nifty is in a range of 18250 to 17750 (+ or – 30 points from this range), see Weekly chart
4. In Intraday, Nifty shot up 200 points from the low point of the day
5. Nifty is making Lower High’s but not able to break the Weekly low with conviction, see hourly chart
6. In hourly chart there is an upper trendline connecting all the lower high’s. If that trendline breaks, Nifty may reach till the range high of 18250
7. On Daily timeframe also Nifty made Hammer Candlestick pattern, which is a sign of reversal. For this pattern to confirm Nifty should trade above 18000, which is Friday’s high.
8. But in Hourly timeframe, Nifty is forming a Bearish Descending Triangle Chart Pattern.

Nifty Intraday Chart

Nifty Daily Chart

Nifty Weekly Chart

Nifty Weekly Options Data :

1. Option Sellers added heavy puts at 17700, 17800 and 17900 strikes in Intraday
2. That means Option Sellers are expecting Nifty will sustain above 17900 and 17800 strikes.
3. Next Highest OI on calls side is at 19000, it may be used for hedging purposes.
4. Option Sellers increased 17900 short straddle positions, compared to Thursday’s OI.
5. 17900 Short Straddle’s Premium is around 230 points, that means options sellers are expecting not more than 250 points move from 17900 level on both sides.

Nifty Monthly Options Data :

1. In Intraday, Option sellers added 17900 and 18000 puts in monthly expiry
2. In Intraday, Unwinded 18100 calls in monthly expiry
3. In monthly expiry, overall Put OI is more than Call OI

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Bank Nifty Analysis :

1. Bank Nifty is also trading in same range from last 4 Week’s and made a Doji candle in Weekly time frame
2. Bank Nifty is in a range of 43600 to 41600, see the Weekly chart below
3. In Intraday Bank Nifty not broken Previous Week’s Low and from the low point of the day Bank Nifty shot up more than 500 points
4. Bank Nifty closed at exactly below the upper trendline
5. If this upper trending line is broken, Bank Nifty may reach till weekly high of 43600 level.
6. Last 3 days Bank Nifty formed hammer candlestick pattern in daily timeframe, to confirm this pattern Bank Nifty should start trading above Friday’s high.
7. But in Hourly timeframe, Bank Nifty is also forming a Bearish Descending Triangle Chart Pattern.

Bank Nifty Intraday Chart

Bank Nifty Daily Chart

Bank Nifty Weekly Chart

Bank Nifty Weekly Options Data :

1. Option Sellers added heavy puts at 42000 in Intraday.
2. This indicates that Bank Nifty may expire above 42000 as per Weekly Option Sellers View.
3. After that major Call OI added at 42500 level.
4. More than half of the Put Sellers at 42000 strike also added calls, making it a 42000 Short Straddle
5. But compared to Put’s, Call’s are less at 42000 strike

Bank Nifty Monthly Options Data :

1. Bank Nifty Monthly Options OI is similar to Thursday, not much difference in OI

Final Thoughts :

1. Nifty and Bank Nifty both are in a bearish trend in short term as of Thursday,
2. But with Friday’s closing trend changed in intraday.
3. To see the trend change, following session should close in positive or flat
4. But should not close in negative
5. If the following session closes in negative, then Trend may change as negative or sideways.
6. Trending move can be seen after breaking the Weekly range in both Nifty and Bank Nifty.

If you are seeing anything else other than what I’m seeing from this data, post your view below in the comments section.

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Disclaimer : I’m not a SEBI registered analyst, these are my views only.