No meaningful change in derivative data, use declines to create longs: Angel Broking

Views of Mr. Jay Purohit (Technical and Derivative Analyst, Angel Broking):

"Despite the muted cues from global bourses, trading for the day began slightly higher; but, our market failed to hold the opening gains and correctly sharply in the first half of the session. However, the Nifty rebounded in the concluding hour to defend the 9400 mark on closing basis. On open interest front, long unwinding was seen on both Nifty and BankNifty in today's session. Among individual liquid counters, TVSMOTOR, PEL, KOTAKBANK, IDEA and ALBK added good amount of fresh longs. On the other hand, huge short formation was seen in stocks like GLENMARK, ORIENTBANK, YESBANK, TORNTPOWER and AXISBANK.

As far as today's index options activity is concerned, 9500 and 9400 call options added fresh positions; however, some unwinding was seen in 9600 strike. On the other hand, good amount of unwinding was observed in 9400, 9300 and 9500 put options, followed by build-up in 9200 strike. The highest open interest remains intact at 9500 call and 9300 put options, which should be the trading range for forthcoming week.

FIIs continued their selling streak in index future segment for the fifth consecutive session. With the shorting of around Rs. 916 crore on Friday, their total selling for the week in index future has reached to Rs. 2787 crores with 16.42% rise in open interest, indicating formations of fresh shorts in the week gone by. As a result, their 'Long Short Ratio' has decreased from 78.80% to 67.20% week-on-week basis. On the contrary, they formed longs in stock futures and call options; and went short in index puts in last week. At the same time, they bought equities worth Rs. 3375 crores in last four sessions, which is a positive sign for the market. Considering above data, we are expecting the Nifty to trade in the range of 9300 to 9500; wherein stock centric approach may fetch better returns. Hence, traders are advised to trade with positive bias till Nifty holds its support zone of 9250 – 9300 level."

Source : Equity Bulls

Keywords