Daily Market Report- 31st May

The Nifty opened with a gap down, close to yesterday's trading low, and continued to trade lower, breaking the previous range. However, tomorrow could have a bearish start, with over 1 lakh ITM Call options added throughout the day.

Daily Market Report- 31st May

Yesterday, the markets remained within the trading range between 18660 - 18575 levels, leading to a Doji pattern on a daily time frame, indicating indecisiveness in the market.

Today, the market opened on a negative note as the Nifty 50 saw a gap down of -39.65 points (-0.21%), and Bank Nifty opened with a gap down of -118.35 points (-0.27%).

As discussed in yesterday's market review, the Nifty commenced the day with a bearish outlook by opening near the lower end of the trading range. Subsequently, it continued its downward movement, eventually breaching the range.

Also, we had anticipated a potential range breakout on the downside and identified 18450 - 18400 as the next significant support level. Remarkably, the Nifty index remained resilient, managing to sustain above the 18450 level throughout the day.

Nifty & BankNifty closed with a negative return of -0.53% & -0.69%, respectively.

Stocks and more:

Stocks that opened today with significant Gap ups & downs are given below:

After significant gaps, prices typically exhibit a tendency to revert back to their mean. If you are interested in profiting from this mean reversion behaviour, it may be an opportunity you are currently missing out on.

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Back Up ended the day with a gain of +1.08%, while Quick Short plummeted.

Quick Short:

Back Up:

Models NAV:

Nifty’s Technical & Data Points:

Technical Points:

  1. Nifty broke the lows of the last 2 days, confirming the bearish sentiments. If 18450 - 18400 is taken out, we expect the market to halt at its previous swing low at 18200 levels.
  2. As we approach tomorrow's expiry, it's important to note that today’s high will act as an immediate resistance around 18600 levels.

Data Points:

  • The highest OI of CE is at 18600, and PE is at 18500. Markets are expected to revolve around these levels for this expiry. If 18500 PE writers start to unwind, we expect the market to head lower.
  • Significant ITM writing has been observed at the 18500 and 18550 levels, further reinforcing bearish sentiment for tomorrow's trading session.

Levels worth monitoring tomorrow:

We expect tomorrow's expiry to commence on a bearish note. However, in the event of a gap up opening, the potential trapping of these writers could trigger an unwinding, resulting in a significant upward movement. Moreover, if the support range of 18450 - 18400 is breached, we expect the market to head towards the swing lows around 18200.

These were some of the pointers based on which we look forward to tomorrow’s expiry on a bearish note.

We would love to know your thoughts. Feel free to share your opinions in the section below.

How do you think tomorrow's expiry will end?

Disclaimer: The opinions expressed in this section are personal views and should not be considered financial advice. Please do your own research and consult with a professional before making any investment decisions.