Nifty RESET, after glitch

NSE:NIFTY   Nifty 50 Index
As I wrote yesterday and expected, Nifty bounced back after the aberration on last Friday. As of now, all European markets are in green and up by more than 1%, Dow Jones, just opened, is trading up by whopping 508 points (+1.61%) and Nasdaq is up by 213 points (+1.62%). So the Friday’s fall is behind us and we look forward for a bright Tuesday morning tomorrow!
1) In our markets, FIIs were net buyers in Equity (125 Crs ) whereas DIIs like in past were net sellers (-195 Crs )- quite low figures, right? Then how Nifty jumped 232 points (+1.6%)? Because, FIIs were net buyers in Index and stock futures by 1498 Crs and 1012 Crs , respectively. Plus there seems to be good buying by retailers. Lately retail buying/ selling too makes huge difference in indices and stocks.
2) If we see option chain, on PUT side, highest Put writing is seen at 14700 (11,234 lots) which also has 2nd highest total OI (24,831 lots) if we consider nearer strikes. As we would expect, the highest total OI is at 14500 (28,387 lots) which has 3rd highest Put writing (7,796 lots). So I would consider 11700 as good support because if we see today’s charts, Nifty has spent not more than one and half hour below 14700, meaning for around 5 hours it was trading above 14700 and closed at 14761- significantly above 14700.
3) On CALL side, we see other signs of strength- there is unwinding on strikes below 14700 (till 14500) and highest Call writing (of 10,107 lots) is seen on far away strike of 15400. Near CMP , highest Call writing is at 14800 (6,008 lots) and 2nd highest Call writing is at 14900 (4083 lots) which pales in front of Put writing figures –meaning not significant resistance is seen at any level. Highest total (Call) OI though is impressive- 48,716 lots at 15000 and 2nd highest total OI is at 14800 (36,800). However, I would not attach much importance to it since these contracts were taken on Friday when Nifty suffered massive fall- these will correct and we will see unwinding in these strikes.
4) On chart, as I wrote yesterday, Nifty didn’t go below 14500, so now the new buying area is between 14500 & 14550. The selling area remains same – 14880 to 14930. However do not take trades in these areas during first 15 and last 30 minutes or so.
Happy trading.

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