http://oceanadesigns.net/envira/black-labrodorita/ Nifty Overall Analysis
Recent banking scams changed the investor’s sentiment and “sell on rally” is the best strategy for the time being. Every rally in the index is used by the FII’s for exiting stocks in the cash market and adding short positions in the derivative markets. Today Rupee hits 3 month low against the dollar and the biggest single day fall for this year. Selloff by the foreign investors and strengthening of the dollar ahead of fed meeting caused the fall for the rupee. Crude oil prices are also rising in the international markets and rising crude oil prices is a worry for our markets. Domestic institutions are supporting our markets from free fall for last few days and they bought shares worth of 1437Cr in the cash market today itself.
Nifty is flirting around the 100 DMA and as we discussed earlier 100 DMA will be the pivotal point coming days. 10270 levels is the major support, index got support around the 10300 levels and pulled back couple of times recently. If index is able to close above the 10450 levels we can expect some short covering and a relief rally. Since this is expiry week we can expect some volatility in next few sessions. Major players have started to “roll over” their derivative positions from current month to next month. There are lots of short positions in the index derivatives we can expect short covering rally coming sessions.
Nifty Metal, Nifty PSU Bank & Nifty Media sectors ended in green and Nifty Bank, Nifty Financial Services & Nifty Realty ended in red today. AMBUJACEM, VEDL & COALIND were the major gainers and M&M, AXISBANK & AUROPHARMA were the major losers. In the NSE stocks, Advance decline was in favor for the bears, 678 stocks advanced and 804 stocks declined. 6 stocks made 52 week high and 48 stocks 52 week low as well.
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FII’s bought 3225 long index futures and added 24354 short Index futures position. FII’s Net Index futures position is 53537 (Short positions).
Pro’s bought 1364 long index futures and added 3601 short index futures position. Pro’s Net Index futures position is 12841 (Short positions).
FII’s bought 5464 long call options and added 11509 short call options. Net call option positions in the index are 35979.
FII’s sold 4130 long put options and added 6578 short put options. Net put option positions in the index are 259309.
PRO’s sold 8498 long call options and covered 11726 short call options. Net call option positions in the index are –256943.
PRO’s bought 1520 long put options and added 19984 short put options. Net put option positions in the index are -72054.
Put call ratio for the current series is 0.82 PCR below .90 is bearish.
India VIX closed today at 16.66 VIX above 13 is bit cautious.
10500CE is currently having the highest OI’s, so it will act as resistances for the February expiry.
10300PE is currently having the highest OI, so it will act as support for the February expiry.
10300 strike will a strong support for current series. We saw good amount of put writing in 10300 strike and 10300PE is having the highest OI for the current series. 10500-10300 will be the OI band for the February month expiry. PRO’s and FII’s together have 389K short positions in the index options and 66K short positions in the index futures as well. Major players have started to “roll over” their derivative positions from current month to next month. We need to analyze roll over data after this expiry to confirm the trend for the march series.
Nifty Technical Analysis
Nifty is flirting near the 100 DMA. During the last 3 corrections nifty got support at the 100 DMA as well and If nifty is able to hold on to the 100 DMA then we can expect trend reversal coming days. If nifty breaches the 10276(the recent low), then the major support will be at the 200 DMA and this movement will be faster.
MACD still gives a sell signal.
RSI and Stochastic indicators show nifty is oversold currently.
Markets are in the control of bears absolutely. However the index respected the yesterdays low. Index was forming lower high lower low formation for the last few sessions and index respected yesterday’s low today thus invalidating the formation. We can expect some upside rally coming days however do not confirm this as a trend reversal. This is expiry week and we can expect movement on both sides for collecting the premiums. There is lot of shorts and we can expect short covering rally as well. We need to analyze the roll over data to confirm whether the short positions will be carry forwarded to next month or not? Long term investors can ignore these noises and can start building their portfolio. Invest only 20% of your capital at current levels and invest rest once you get a trend confirmation. Our long term trend is still bullish as long as we are holding to our previous swing low 10030.
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