prathamaggarwal

BIG GAME BEING PLAYED!!!! WHERE ARE WE HEADING? (PART 2)

Education
NSE:NIFTY   Nifty 50 Index
THIS IS THE SECOND PART OF THE ANALYSIS ON NIFTY FALL. IF YOU NOT READ THE PREVIOUS ONE, PLEASE READ THE SAME FOR BETTER UNDERSTANDING. I HAVE ALSO SHARED ITS LINK BELOW.

Exactly as per our prior observation, On 11 October Nifty and Bank Nifty crashed 300/800 Points at opening and thereafter showed a little recovery. However it ll be incorrect to assume any relief as of now.

Now In continuation to the first part, As on 11 October 18, FII has closed their longs amounting to 10K and have further added 6.3K Shorts. Now the earlier shorting has increased to 97K (approx, mind you, on 17 September it was 44K, and Nifty /Bank Nifty fell 400/1100 points to clear that.)

I presume with Dollar Increasing, IT Sector is a direct beneficiary. And whatever long positions FII had in Index were in IT Sector. However over the past 2 days, even IT sector has started falling. Reasons for falling IT Sector despite rise in Dollar? Some general correction, and bad results. Tata Elexi despite being a direct beneficiary of Dollar failed to post good results. Also, Even TCS posted just in line results. Mind you These 2 companies were exceeding the estimates in all the prior results. As a result Tata Elxsi fell upto 15% on Result day and TCS fell upto 7-8% before posting result (probably due to bad expectations of result).

So, those 10K longs might be pertaining to IT sector which are now being closed. So IT sector might stay in pressure in coming days. Nifty 50 has around 12% allocated to IT Sector. Any drastic fall in IT can drag Nifty big way. The market probably recovered today, so FII could exit their 10K Long positions.

Further, as already informed, shorts have been increased to 97K. (6.3K Added today on 11 October)

If we talk about call Options. FII Have net 44K Calls in comparison to mind blogging 210K Puts. Put Call Ratio is 5:1.

So when do you take 5 Puts and just 1 Call?

You already know the answer.

Just one advice : Save your money right now. You will get ample of opportunities in the coming month. Trust me ample of.

Feel free to ask queries and share concerns. These are just my thoughts, and my view to the things going around. I hope it Helps.

Thanks.
Comment: 10K longs might not be totally pertaining to IT Sector. However alot of part of IT Sector would gave been covered now!
Comment: Some extract from the above description shared on 11 October.

"So, those 10K longs might be pertaining to IT sector which are now being closed. So IT sector might stay in pressure in coming days. Nifty -1.24% 50 has around 12% allocated to IT Sector. Any drastic fall in IT can drag Nifty -1.24% big way. The market probably recovered today, so FII could exit their 10K Long positions. "

Mindtree, TCS, Infy falling? :)