By Ruchit Jain
Post final week’s expiry, we noticed some consolidation for a few periods because the PCR-OI was in oversold territory and markets had been reluctant to right additional. In Monday’s session, Nifty surpassed the 16000 mark which led to a brief overlaying within the futures phase and the choices writers ran to cowl their positions. Nifty examined 16400 mark forward of the weekly expiry. However, markets weren’t but out of the woods and a pointy international unload led to an enormous hole down opening on the weekly expiry day and Nifty once more corrected to 15800.
The current pullback transfer 15750 to 16400 was primarily because of some brief overlaying and we didn’t see any important contemporary longs. Now, in Thursday’s correction contemporary shorts had been added once more and the broad market sell-off signifies a powerful grip by the bears. FII’s lengthy brief ratio has elevated marginally to 30 p.c from its low of 18 p.c which was seen throughout mid-month. However, the information remains to be bearish as 70 p.c of their positions are nonetheless on the brief facet. Now till any main reversal is seen in international markets, we don’t anticipate any important brief overlaying from FII’s and so they could carry these positions until the approaching month-to-month expiry.
On the flipside, the retail purchasers nonetheless have majority of the positions on the lengthy facet with their ‘Long Short Ratio’ round 60 p.c. In choices phase, 16000 name possibility for the month-to-month sequence have highest open curiosity (amongst close by strikes) indicating resistance at this zone. However, majority of those positions had been fashioned on Thursday because the index opened hole down and continued to slip decrease. On the flipside, 15000 put possibility has the best open curiosity amongst places and 15500 strike too has respectable positions excellent. Thus, 15500 could be seen as fast assist for the approaching week.
Since the beginning of the May sequence, the stronger arms have repeatedly traded with extra brief positions and till there’s change within the knowledge, the development stays bearish. As per the choices knowledge, 16000 and 16200 are the fast resistances now and helps are positioned round 15500 and 15200. Traders are suggested to proceed to commerce cautiously and use in between pull backs to kind brief positions. The view stays bearish until the information stays destructive and as soon as we see any change within the knowledge, then just one ought to look to vary the view.
(Ruchit Jain is the Lead – Research at 5paisa.com. The views expressed are the creator’s personal. Please seek the advice of your monetary advisor earlier than investing.)
Source: www.financialexpress.com”