5 days of continuous fall, one day rise and today a Doji candle- meaning indecision! So to Nifty we ask- which way bro? Let us find out.
Let us look at FII and DII ( Net buy/sell) figures for past 6 days (+ bought & - sold):
15 March: FIIs: -1101 Crs DIIs: -749 Crs Nifty 14929 (-101)
16 March: FIIs: +1692 Crs DIIs: -1169 Crs Nifty 14910 (-19)
17 March: FIIs: +2626 Crs DIIs: -563 Crs Nifty 14721 (-189)
18 March: FIIs: +1258 Crs DIIs: -1116 Crs Nifty 14558 (-163)
19 March: FIIs: +1418 Crs DIIs: +560 Crs Nifty 14744 (+186)
22 March: FIIs: -787 Crs DIIs: +543 Crs Nifty 14736 (-7)
Till now we believed that if FIIs are buying market is most likely to go up (and when FIIs are buying DIIs look to sell) because normally FII interest is in blue chip stocks or say Nifty stocks. But analyse above given figures closely and we see that it is not true anymore. On 16th, 17th & 18th March FIIs bought well, DIIs sold less than what FIIs bought and yet markets fell- and fell massively! So what were FIIs buying? Only logical explanation is FIIs are buying non-nifty value picks and booking profit in Nifty stocks whose valuations are seen very high. On Friday, both bought and markets went up sky-high from it's intraday low. Today, FIIs sold marginally and DIIs bought marginally and Nifty closed flat. What does it mean? To me it says that FIIs will continue to book profits in Nifty stocks and DIIs will try to buy here and there, which in turn means markets would NOT be going up as much as it would come down. Let us check options data.
On PUT side, highest total OI is at 14500 (54,485) but there is Put unwinding (-550) on this strike today. But there is PUT writing on higher strikes, the maximum being on 14700 (5,252). So does it mean that Put writers are getting confident and shifting bets higher? Look at CALL side- on 14700 Call writing is almost same (5423). The total OI Call side (22,163) is also close to that on Put side (24,614). So it seems that lot of people have taken short straddle at 14700 strike @ combined premium of 260+ during the day, meaning NO, the Put writers are not shifting their bets higher and which also tells us that these traders See Nifty movement between 14700 +/- 250, i.e between 14450 & 14950. Effectively, it means between 14500 and 15000 which is right since on 15000 strike total CALL OI is 56,952 lots and Call writing is of 12,518 lots which is pretty impressive. Also if we add near ATM CAll OI and Call writing, we see that it is more than that on PUT side. So here too, more traders are writing Calls than Puts.
On Charts too, Nifty closed as a Doji candle with lower high but higher low. So if world markets are seen as flat or negative tomorrow morning we are most likely to fall than rise and if the world markets are solidly in green, we may rise in first half but will correct later, I think. So only logical levels are buy near 14500 and sell near 15000.
Let us look at FII and DII ( Net buy/sell) figures for past 6 days (+ bought & - sold):
15 March: FIIs: -1101 Crs DIIs: -749 Crs Nifty 14929 (-101)
16 March: FIIs: +1692 Crs DIIs: -1169 Crs Nifty 14910 (-19)
17 March: FIIs: +2626 Crs DIIs: -563 Crs Nifty 14721 (-189)
18 March: FIIs: +1258 Crs DIIs: -1116 Crs Nifty 14558 (-163)
19 March: FIIs: +1418 Crs DIIs: +560 Crs Nifty 14744 (+186)
22 March: FIIs: -787 Crs DIIs: +543 Crs Nifty 14736 (-7)
Till now we believed that if FIIs are buying market is most likely to go up (and when FIIs are buying DIIs look to sell) because normally FII interest is in blue chip stocks or say Nifty stocks. But analyse above given figures closely and we see that it is not true anymore. On 16th, 17th & 18th March FIIs bought well, DIIs sold less than what FIIs bought and yet markets fell- and fell massively! So what were FIIs buying? Only logical explanation is FIIs are buying non-nifty value picks and booking profit in Nifty stocks whose valuations are seen very high. On Friday, both bought and markets went up sky-high from it's intraday low. Today, FIIs sold marginally and DIIs bought marginally and Nifty closed flat. What does it mean? To me it says that FIIs will continue to book profits in Nifty stocks and DIIs will try to buy here and there, which in turn means markets would NOT be going up as much as it would come down. Let us check options data.
On PUT side, highest total OI is at 14500 (54,485) but there is Put unwinding (-550) on this strike today. But there is PUT writing on higher strikes, the maximum being on 14700 (5,252). So does it mean that Put writers are getting confident and shifting bets higher? Look at CALL side- on 14700 Call writing is almost same (5423). The total OI Call side (22,163) is also close to that on Put side (24,614). So it seems that lot of people have taken short straddle at 14700 strike @ combined premium of 260+ during the day, meaning NO, the Put writers are not shifting their bets higher and which also tells us that these traders See Nifty movement between 14700 +/- 250, i.e between 14450 & 14950. Effectively, it means between 14500 and 15000 which is right since on 15000 strike total CALL OI is 56,952 lots and Call writing is of 12,518 lots which is pretty impressive. Also if we add near ATM CAll OI and Call writing, we see that it is more than that on PUT side. So here too, more traders are writing Calls than Puts.
On Charts too, Nifty closed as a Doji candle with lower high but higher low. So if world markets are seen as flat or negative tomorrow morning we are most likely to fall than rise and if the world markets are solidly in green, we may rise in first half but will correct later, I think. So only logical levels are buy near 14500 and sell near 15000.