Fed Reserve Indicates Caution. BANK NIFTY Signals Upside? - Pre-Market Analysis Report


What Happened Yesterday?

NIFTY started the day at 19,770 with a gap-up of 77 points (well above the important resistance zone). After initial consolidation, the index moved up to 19,830 levels but faced rejection. It then fell back to the opening levels and consolidated. Nifty closed at 19,783, up by 89 points or 0.45%.

BANK NIFTY started the day at 43,790 with a gap-up of 207 points. The index mostly consolidated during the first half, but gave a sharp fall to 53,585 levels after 1 PM. Then, BNF bounced back and later consolidated. BNF closed at 43,689, up by 104 points or 0.24%.

U.S. markets closed in the red. The European markets closed in the red.

What to Expect Today?

Asian markets are trading mostly in the green.

The U.S. Futures are trading in green.

GIFT NIFTY is trading in green at 19,865.

All the factors combined indicate a flat to gap-up opening in the market.

NIFTY has supports at 19,750, 19,720 and 19,640. We can expect resistances at 19,790, 19,840 and 19,870.

BANK NIFTY has supports at 43,680, 43,560 and 43,470. Resistances are at 43,780, 43,840 and 43,960.

Foreign Institutional Investors net-sold shares worth Rs -455 crores. Domestic Institutional Investors net-bought worth Rs 721 crores.

INDIA VIX is higher at 12.23.

From the FOMC meeting minutes released yesterday, we got an idea of how the U.S. Federal Reserve is proceeding with interest rate hikes.

Fed officials agreed at their last policy meeting that they would proceed "carefully" and only raise interest rates if progress in controlling inflation failed. Do note that this is the minutes of the meeting from October 31st, and just confirms expectations.

Yesterday’s FINNIFTY expiry was one of the most consolidating ever. The index traded in a 40-point zone and gave good profits for option sellers.

Today in BANK NIFTY, there is a tight range for option sellers between 43,500 and 44,000. There was high option writing on both sides of the index yesterday.

Even though the U.S. market fell yesterday night, there are 2 things supporting the global markets. One is the minutes of the meeting indicating that reckless interest rate hikes will no longer take place. The other is still the Dow Jones and NASDAQ are above their recent breakout levels.

So with this, and nearby put selling, I would say BANK NIFTY is more likely to move up today.

We will be continuing our NIFTY and BANK NIFTY trades today. You can check out our trades on marketfeed app or our website!

Make sure that you tune in to The Stock Market Show at 7 PM on our YouTube channel. All the best for the day!

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