Nifty and Bank Nifty Bearish Harami: Reversal on the Cards?

Markets reversed sharply on Tuesday, failing to extend Monday’s bullish move. Nifty closed at 24578 (down 1.39%) while Bank Nifty closed at 54940 (down 0.80%). Both indices formed a Bearish Harami pattern on the daily chart – a potential sign of reversal.

While the reversal is not yet confirmed, the price action and derivative data suggest a cautious stance is warranted.

NIFTY ANALYSIS

• Nifty opened weak and failed to sustain above 24800.

• This rejection led to sharp intraday selling, showing signs of trend exhaustion.

OI & PCR:

Image from Sensibull

• PCR: 0.68 near ATM and 0.70 overall – slightly weak.

• OI in Nifty Futures: Dropped by 5.58% → Indicates Long Unwinding.

Key Levels:

• Support: 24500 and 24000

• Resistance: 24800 and 25000

View: Neutral bias for now. If today confirms the bearish Harami pattern, we may see stronger selling in the coming sessions.

BANK NIFTY ANALYSIS

• Bank Nifty too saw selling from the open.

• Despite some intraday recovery attempts, it remained under pressure.

OI Data:

• OI in Bank Nifty Futures: Down by 5.57% → Long Unwinding

View: Same as Nifty – weak bias continues. Avoid aggressive long trades until structure improves.

FII Data: A Warning Sign?

• FIIs sold more than 6500 CR in equities.

• Their positions in index futures are also turning bearish, indicating institutional caution.

Final Thoughts:
With FIIs turning net sellers again, the short-term market setup looks weak. Watch for confirmation of the reversal before initiating directional trades.