Today was an important day for a stock market participant whether he is a trader, an investor, retail or from an institution. The last 2 days of weekends must have been spent on analyzing, number crunching and strategizing by analysts of big institutions. A lot were waiting to see which direction market takes from hereon.
Nifty today opened with a big gap of 268 points, made a low of 11471 in first half an hour, went up and later throughout the day never came down. It then closed at 11600, 129 points above low and 58 points above opening price. To me, this speaks of strength. Let us examine from other aspects as well-
1) FII & DII data: As per provisional figures for today, FIIs were net buyers by 2684 Crs and DIIs were net buyers by 292 Crs (only!). FII figure is important. For last so many weeks I haven't seen such high 'Net buy' number for FIIs. This also surely signals shift in strategy of rampant selling which FIIs did till friday. Final figures for last Friday show that FIIs were Net buyers in Equity by 593 Crs; in Index futures by 5079 Crs and in stock futures by 1682 Crs - All Net buying figures. Again these figures are on much higher side. Just to give you the perspective, in stock futures, FIIs Bought futures worth 33701 Crs and Sold worth 32019 Crs- These figures earlier used to be in the range of 12000 Crs. All in all, this conveys that FIIs from now onwards will not be on aggressively sell side. Selective buy & sell will be there as it always is.
2) Option chain data: (Nifty CMP=11600.20) At the strike of 11600 (ATM strike), on PUT side, we have total OI of 17.34 lakh contracts out of which 16.19 is fresh PUT writing. On CALL side, total OI is 20.01 lakh contracts with fresh writing of only 1.56 lakhs. What does this mean? This fresh call writing is too weak a resistance for bulls and 20 lakh OI might face unwinding. On PUT side, highest total OI and fresh Put writing is at 11500 strike and 2nd highest total OI and fresh Put writing, both, are at 11400 strike. So 11500 & 11400 looks solid support. On CALL side, there is no clarity yet. Highest total OI (21 lakhs) is seen at 11500 but it has fresh unwinding of 6.40 lakh contracts and 2nd highest total OI of around 20 lakhs is seen at 4 different strikes- 11600, 11700, 11800 & 12000. So call writers are not yet unanimous as far as credible resistance is concerned.
3) Charts: Nifty opened with a gap, made a base-like green candle with smaller body and bigger shadows. But it is above 11500 and that signify bullishness. So in one stroke it is now above all long term averages (100, 200 DEMA). So one should go long on nifty but levels are not clear. yet 11450 looks good level to buy if it comes there.
All the best. Happy trading.
Nifty today opened with a big gap of 268 points, made a low of 11471 in first half an hour, went up and later throughout the day never came down. It then closed at 11600, 129 points above low and 58 points above opening price. To me, this speaks of strength. Let us examine from other aspects as well-
1) FII & DII data: As per provisional figures for today, FIIs were net buyers by 2684 Crs and DIIs were net buyers by 292 Crs (only!). FII figure is important. For last so many weeks I haven't seen such high 'Net buy' number for FIIs. This also surely signals shift in strategy of rampant selling which FIIs did till friday. Final figures for last Friday show that FIIs were Net buyers in Equity by 593 Crs; in Index futures by 5079 Crs and in stock futures by 1682 Crs - All Net buying figures. Again these figures are on much higher side. Just to give you the perspective, in stock futures, FIIs Bought futures worth 33701 Crs and Sold worth 32019 Crs- These figures earlier used to be in the range of 12000 Crs. All in all, this conveys that FIIs from now onwards will not be on aggressively sell side. Selective buy & sell will be there as it always is.
2) Option chain data: (Nifty CMP=11600.20) At the strike of 11600 (ATM strike), on PUT side, we have total OI of 17.34 lakh contracts out of which 16.19 is fresh PUT writing. On CALL side, total OI is 20.01 lakh contracts with fresh writing of only 1.56 lakhs. What does this mean? This fresh call writing is too weak a resistance for bulls and 20 lakh OI might face unwinding. On PUT side, highest total OI and fresh Put writing is at 11500 strike and 2nd highest total OI and fresh Put writing, both, are at 11400 strike. So 11500 & 11400 looks solid support. On CALL side, there is no clarity yet. Highest total OI (21 lakhs) is seen at 11500 but it has fresh unwinding of 6.40 lakh contracts and 2nd highest total OI of around 20 lakhs is seen at 4 different strikes- 11600, 11700, 11800 & 12000. So call writers are not yet unanimous as far as credible resistance is concerned.
3) Charts: Nifty opened with a gap, made a base-like green candle with smaller body and bigger shadows. But it is above 11500 and that signify bullishness. So in one stroke it is now above all long term averages (100, 200 DEMA). So one should go long on nifty but levels are not clear. yet 11450 looks good level to buy if it comes there.
All the best. Happy trading.