Momentum to continue, avoid longs: Angel Broking

Views of Ms. Sneha Seth (Derivative Analyst, Angel Broking):

"We started-off today's session on a slightly positive note; but, soon later fresh selling got attracted quite similar to past few trading sessions. Due to strong bout of selling in the second half, the Nifty eventually slipped below the 9750 mark on a closing basis.

If we look at Nifty options activity today, we witnessed significant OI addition in 9700-9900 call options, followed by some unwinding in 9950-10200 strikes. This resulted, the highest concentration of OI in call option shifting lower to 9700 from 9800 strike. On the other side, 9600-9750 put options added some fresh positions. Hence, maximum open interest in put options now stood at 9800 due to good amount of short covering seen in 9800-9900 puts.

Although in September series our market posed new highs, FIIs continued their selling streak in cash market segment. At the same time, they formed huge short positions in index futures along with longs in index puts and writing call options. This massive selling resulted their index futures 'Long Short Ratio' declining below 50 for the first time in this calendar year. Taking into consideration the above data, we believe market may continue to remain under pressure in near term. Thus, traders are advised to avoid any fresh longs and utilise bounce to form fresh short positions."

Source : Equity Bulls

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