By Ruchit Jain
Post the latest pullback transfer, our markets witnessed a correction of over 500 factors in Nifty from its latest swing excessive of 16790. Nifty breached the 16300 mark on the weekly expiry day, however once more it managed to tug again increased and finish a tad beneath 16500. We witnessed some contemporary brief additions within the index on this latest correction. The Bank Nifty index too has seen an analogous correction in the previous few days and has ended simply above the 35000 mark.
Stock markets have been witnessing numerous uncertainty as there have been stock-specific actions the place some sectors similar to Oil & Gas are witnessing optimistic motion because of an increase in Crude Oil costs whereas some sectors have witnessed brief formations and have seen underperformance. The index too witnessed some brief formations however majorly the FIIs have unwound longs and have shaped some extra brief positions. Their ‘Long Short’ Ratio has now fallen to beneath 25 per cent, which implies that greater than 75 per cent of their positions within the index futures are on the brief aspect. Recently, our markets have seen a corrective section when the stronger palms have shaped brief positions and therefore, this information doesn’t bode properly for the bulls. In the choices section, the approaching weekly sequence has an open curiosity focus at 16500 and 16600 strikes whereas the 16200 put possibility has first rate open curiosity excellent. This information signifies that 16500-16600 will probably be seen as a right away resistance zone on pullback strikes whereas 16200 will probably be seen as rapid help. Now with 75 per cent of positions of FIIs on the brief aspect in index futures, loads will rely upon whether or not they cowl their brief positions which can solely be a set off to drive the markets increased. Until we see any such short-covering by them, the pattern will stay destructive and therefore, merchants ought to look to loosen up longs on pullback strikes.
For the approaching weekly expiry, the helps for Nifty are positioned round 16200 adopted by 16000 whereas resistance is seen round 16500-16600 vary adopted by 17000. Traders are suggested to remain cautious on pullbacks and commerce with a stock-specific strategy within the close to time period.
(Ruchit Jain is a Lead Research at 5paisa.com. Views expressed are the writer’s personal. Please seek the advice of your monetary advisor earlier than investing.)
Source: www.financialexpress.com”