We are back to square one. Nifty resumed the week with heavy selling after friday's aberration. On daily charts, banknifty (BNF) made a red candle but with higher high and higher low than previous candle and Nifty made a strong bearish candle with far lower low and lower high than previous candle. So again BNF is heading north and Nifty heading south. On friday, BNF pulled NIfty up and today Nifty pulled BNF down. hence- we are back to square one. But now the situation looks more grim for bulls.
1) Provisional figures show that FIIs made Net Sale of 704 Crs and DIIs made Net Purchase of 1352 Crs. Final figures show that FIIs were Net Sellers in Equity by 1417 Crs and in Index futures by1049 Crs (big numbers) ; They were Net Buyers in stock futures by 721 Crs. This shows that FIIs/FPIs are still bearish on indices but to hedge they are doing some value buying in quality stocks. But the focus is still to Sell.
2) Nifty's option chain analysis shows startling developments. On PUT side, there is PUT Unwinding on all strikes above 11200. On 11200 strike, we have highest total OI of 16.29 lakhs but unwinding of 5.30 lakhs (highest unwinding!). Next highest total OI (14.73 lakhs) is at 11100 which also has highest fresh put writing of 4.49 lakhs.and on 11000 also there is total OI of 13.7 lakhs with small put writing of 1.86 lakhs only. This makes us conclude that PUT writers are abandoning 11200 and shifting to lower strikes. isn't it? On CALL side, at 11200 strike, total OI is of 17.15 lakhs (3rd highest) and fresh Call writing is of 14.44 lakhs (2nd highest)- compare these with that on PUT side. So if you compare both CALLs and PUTs on 11200 strike alone, we see that 11200 now is resistance more than support! On Call side, highest total OI of 33.94 lakhs and highest fresh Call writing of 17.49 lakhs is at the strike of 11300. Now, therefore I would put Nifty trading range at 11100 to 11300.
3) On daily chart, NIfty shows RSI of 29.83- now in oversold area.MACD still shows good divergence with histogram showing blood red candle. All point in only one direction- Nifty is going to test low (made on 14th May) of 11108. Go short. I have indicated Shorting levels on 15 min chart.
Happy trading. All the best.
1) Provisional figures show that FIIs made Net Sale of 704 Crs and DIIs made Net Purchase of 1352 Crs. Final figures show that FIIs were Net Sellers in Equity by 1417 Crs and in Index futures by1049 Crs (big numbers) ; They were Net Buyers in stock futures by 721 Crs. This shows that FIIs/FPIs are still bearish on indices but to hedge they are doing some value buying in quality stocks. But the focus is still to Sell.
2) Nifty's option chain analysis shows startling developments. On PUT side, there is PUT Unwinding on all strikes above 11200. On 11200 strike, we have highest total OI of 16.29 lakhs but unwinding of 5.30 lakhs (highest unwinding!). Next highest total OI (14.73 lakhs) is at 11100 which also has highest fresh put writing of 4.49 lakhs.and on 11000 also there is total OI of 13.7 lakhs with small put writing of 1.86 lakhs only. This makes us conclude that PUT writers are abandoning 11200 and shifting to lower strikes. isn't it? On CALL side, at 11200 strike, total OI is of 17.15 lakhs (3rd highest) and fresh Call writing is of 14.44 lakhs (2nd highest)- compare these with that on PUT side. So if you compare both CALLs and PUTs on 11200 strike alone, we see that 11200 now is resistance more than support! On Call side, highest total OI of 33.94 lakhs and highest fresh Call writing of 17.49 lakhs is at the strike of 11300. Now, therefore I would put Nifty trading range at 11100 to 11300.
3) On daily chart, NIfty shows RSI of 29.83- now in oversold area.MACD still shows good divergence with histogram showing blood red candle. All point in only one direction- Nifty is going to test low (made on 14th May) of 11108. Go short. I have indicated Shorting levels on 15 min chart.
Happy trading. All the best.