By Ruchit Jain
The May sequence was divided into two components whereby Nifty corrected sharply to virtually retest the March lows of 15700, whereas the index then consolidated inside a broad vary within the latter a part of the sequence. With modest restoration from the lows on the finish, Nifty ended a tad beneath 16200 with a lack of over 6 per cent in comparison with the final expiry. During the May sequence, we witnessed aggressive quick formations through the first couple of weeks, whereas the pullbacks within the latter half witnessed some quick masking. Although the retail participation within the derivatives phase has elevated considerably in latest occasions; FIIs had been within the driver’s seat as they began the May sequence with quick positions and maintained bearish positions all through the sequence.
Now, if we take a look at rollovers, in Nifty they’re at 79% whereas rollover in Bank Nifty stands at 85%. Rollover figures point out that some shorts are nonetheless intact and have been rolled to the June sequence. If we take a look at FII’s positions, their ‘Long Short Ratio’ is round 45 per cent which went to as little as 18 per cent through the May sequence. Their positions point out that they’ve rolled extra quick positions, however the quantum has decreased. On the opposite hand, the retail shoppers have began June sequence with 53 per cent lengthy positions. Before expiry, they persistently had about 60 per cent lengthy positions which signifies that they’ve decreased some longs.
Now for the approaching sequence, the formation of contemporary positions within the subsequent few days is prone to dictate market route. India VIX surpassed 25 ranges a few days in the past, however has once more declined to 22 and is in a snug zone. In the choices phase, 17000 name and 16000 put choices have the best open curiosity within the coming weekly sequence. In the close by name choices, 16500 has seen some open curiosity addition and thus, 16000 and 16500 are prone to be essential ranges.
The knowledge signifies that we aren’t out of woods but, however the index can see some pullback firstly of the brand new sequence. On pullback strikes, 16500 would be the essential degree to be careful for. Traders can look to commerce for a pullback transfer; however as soon as the market reaches the resistance zone, one ought to then look to loosen up. On the flipside, 16000 -15900 can be seen as instant help beneath which, the latest swing low of 15700 would be the sacrosanct help.
(Ruchit Jain is the Lead Research at 5paisa.com. The views expressed are the writer’s personal. Please seek the advice of your monetary advisor earlier than investing.)
Source: www.financialexpress.com”