Rajandran R Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, USDINR and High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in and Co-Creator of Algomojo (Algorithmic Trading Platform for DIY Traders)

Stock Market Crash 2016 and Index Futures Sentiment Outlook

2 min read

Selloff in the Global Market and Indian Stock market goes intensive last week and in the last two months alone Nifty had lost nearly 12.33%. Such a deep cuts in the market are more likely due to Global Sentiment, Chinese Market manic sell-off, local NPA Banking Crisis. Raising credit spreads – Junk bond market is flashing out warning signs and the spiking Gold-Oil Ratio above 30 year high are some of the pre-warning signals for this market crash. It should be noted that Indian markets dropped despite strong GDP numbers.

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Last Week Major Economic Data Release

NSE Major Sectoral Performance (Year To Date)
Sectoral Performance

Among the Indian Sectors PSU banks are the top loosers and lost more than 32% of its weight. Bank Nifty CNX Infra, CNX Finance, CNX Metal, CNX Media lost more than 15% of its weight. CNX Midcap and CNX Small Cap are heavily under performing nifty and lost 15.17% and 23% respectively

Sectoral Performance1

NPA issues and Banks

Among the major banks State Bank, PNB, Canara Bank, Bank of India are the major banks which lost more than 50% from its 52 week high. However banks like HDFC Bank, Yes Bank, IndusInd Bank, Kotak Bank are relatively outperforming their peers and its underlying index Bank Nifty.

Bank Stocks

Nifty and Bank Nifty Index Future Sentimental Outlook

Nifty Future EOD Charts
NF Daily

Nifty and Bank Nifty Daily Sentiment continues to be in sell mode however last friday panic recovery had created support levels around 6920 and 13870 levels respectively and also the friday recovery in US and European markets would have erased the extreme negative sentiment. Those who are in longs should be cautious only if the support levels are broken.

Near term resistance level in Nifty futures comes around 7260 and 73320 zone and Bank Nifty resistance comes around 14550-14671. It should be noted that chinese markets are in long holidays and markets will be opening on Monday. Any positive suprise from china could further ease out the negative emotions from the Global markets and boost further confidence for a follow up rally in Global markets.

Bank Nifty Future EOD Charts
BNF Daily

Stats from Twitter Media

Open Interest Lookup

Open Interest

Nifty Options open interest lookup shows that currently option writers are concentrated over 7300CE, 7400CE, 7500CE put writing. And the participant wise open interest data indicates that currently FII are holding naked puts and writing calls for this series. However retail traders are holding net naked calls and writing puts.

Is the Market Bottomed out in the short run? Looks like it is and only market has the rest of the answers!

Rajandran R Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, USDINR and High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in and Co-Creator of Algomojo (Algorithmic Trading Platform for DIY Traders)

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2 Replies to “Stock Market Crash 2016 and Index Futures Sentiment Outlook”

  1. I had read your blog it’s very knowledgeable give me lots of information I am request ing you I am new in investment in share market can you give details how to calculate charts some one had say that by live chart reading you can see the buying or selling on that time you have to entre is this time pl advise me thanking you sanjay

  2. Hi Rajandaran,

    A very good article. Indepth review of latest positions/factors that will affect the market’s next move.

    Thanks,

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