Today it was mixed feeling for me- both the areas gave reversals but also hit stop- losses. That FIIs would buy today was my hunch since DIIs sold heavily yesterday (Net Sale of 1593 crs - highest net sale fugure in last 5 days). But there is one thing that we must understand now, which I am explaining below:
1) FII & DII data: For past 5 trading sessions in a row, DIIs are selling, which means they are booking profits. FIIs on the other hand are predominantly buying. And the volume of DII sales is increasing. This to me clearly shows that DIIs will not allow Nifty to go much higher. Higher it goes mightier will be selling since havier would be profit booking. Today also, FIIs were net buyers by 1011 Crs and DIIs were net Sellers by 1117 Crs. A season of consolidation begins!
2) Option chain data: On PUT side, highest total OI is seen at 11900 (25.17 lakhs) but highest fresh Put writing is seen at 11950 (10.17 lakhs). So Put writers are getting confident of higher expiry. But due to reason mentioned above I will put my support at 11900. On CALL side, there is unwinding at 12000 and almost all strikes below, which shows that Call writers are thinking of higher expiry. Still the highest total OI (25.75 lakhs) is at 12000 and highest fresh Call writing (6.58 lakhs) is at 12050. Even though there is unwinding at 12000, I expect expiry between 11900 & 12000.
3) Charts: Nifty finished as a bullish engulfing candle with long wicks which means that there is selling pressure at top but demand also at lower levels. With today's rise a buying area is created which is marked on 15 min chart. On daily chart, RSI is at 71 (overbought) level. Well, that doesn't mean it will fall tomorrow immediately but selling will creep in. At 12000-12050 resistance will be there so one can short at higher limit but for next expiry.
All the best. Happy trading.
1) FII & DII data: For past 5 trading sessions in a row, DIIs are selling, which means they are booking profits. FIIs on the other hand are predominantly buying. And the volume of DII sales is increasing. This to me clearly shows that DIIs will not allow Nifty to go much higher. Higher it goes mightier will be selling since havier would be profit booking. Today also, FIIs were net buyers by 1011 Crs and DIIs were net Sellers by 1117 Crs. A season of consolidation begins!
2) Option chain data: On PUT side, highest total OI is seen at 11900 (25.17 lakhs) but highest fresh Put writing is seen at 11950 (10.17 lakhs). So Put writers are getting confident of higher expiry. But due to reason mentioned above I will put my support at 11900. On CALL side, there is unwinding at 12000 and almost all strikes below, which shows that Call writers are thinking of higher expiry. Still the highest total OI (25.75 lakhs) is at 12000 and highest fresh Call writing (6.58 lakhs) is at 12050. Even though there is unwinding at 12000, I expect expiry between 11900 & 12000.
3) Charts: Nifty finished as a bullish engulfing candle with long wicks which means that there is selling pressure at top but demand also at lower levels. With today's rise a buying area is created which is marked on 15 min chart. On daily chart, RSI is at 71 (overbought) level. Well, that doesn't mean it will fall tomorrow immediately but selling will creep in. At 12000-12050 resistance will be there so one can short at higher limit but for next expiry.
All the best. Happy trading.