THIS WEEK NIFTY FORMS A "'LONG-LEGGED DOJI'"

Today, Nifty almost erased its gains from the previous day to finish down 1.3% as global peers corrected after Federal Reserve Chair Jerome Powell announced a 50% interest rate hike at next month's monetary policy meeting indicated basis points, hurt market sentiment. Banks, financial services, metals and pharma stocks have been hit hard. Nifty formed a bearish candle on the daily charts as the close was below the open levels, but there was some sort of leggy doji pattern formation on the weekly scale, indicating the bears' indecisiveness. This week, nifty lost 1.7%. A typical long-legged doji pattern occurs when the open price is almost equal to the close price, but there is a lot of intra week movement on either side.

As the markets seem to be in a period of high volatility with no right direction, it is prudent to avoid index bets at this point until some signs of stability are visible for the next week. On the options front, there was maximum open call interest at 18,000 strike followed by 17,500 strike, while maximum open put interest was seen at 17,000 strike followed by 16,000 strike. Significant call writing was seen at 18,000 strikes and then 17,400 strikes, while puts were seen at 17,000 strikes..On the stock front, there was a positive setup in United Breweries, Mindtree, Colgate Palmolive, Adani Ports, Marico, M&M, Biocon, Maruti Suzuki and Asian Paints, while Hindalco, ICICI Lombard General Insurance, Lupin, Torrent Pharma, SBI, Piramal Enterprises, dr Reddy's Labs, Cipla, Glenmark Pharma, HDFC AMC, RBL Bank and Tata Steel.