Nifty Daily Analysis as on 21/02/2018 – Futures & Options Derivative Analysis (Read More) Nifty Overall Analysis

Nifty is consolidating after the recent selloffs and getting ready for a breakout. Index formed inside bars for last two days in the daily candlestick chart ahead of monthly expiry. Today’s candlestick formation resembles to a ‘Hammer’ pattern. Hammer pattern is a trend reversal pattern however we cannot depend candlesticks alone for the confirmation. Wick for the today’s candle indicates that there was good buying interest at the lower levels. IT stocks were in the front-line with back of weak rupee.

Tomorrow it’s the February series expiry and we can expect some volatility in the market. There are lot short positions in the index derivatives for the current series and we can expect the short covering rally. 10430-10450 will be the short term resistance and closing above these levels looks bullish. FII’s selling in the cash markets is worrisome and Domestic liquidity is what supporting our markets at lower levels. FII’s sold shares worth of 1214Cr and DII’s bought shares worth of 1375Cr in the cash markets. Nifty closed near the 100 DMA and close above the 100DMA looks bullish. Also, VIX is cooling for the last few sessions. Global markets have also recovered from the recent sharp selloffs.

Nifty IT, Nifty PSU Bank & Nifty FMCG sectors ended in positive note and Nifty Pharma, Nifty Metal & Nifty Realty ended in negative note today. HCLTECH, TECHM & TCS were the major gainers and SUNPHARMA, HINDALCO & BAJFINANCE were the major losers. In the NSE stocks, Advance decline was in favor for the bears, 558 stocks advanced and 937 stocks declined. 2 stocks made 52 week high and 45 stocks 52 week low as well

get link Nifty Derivative Analysis

FII’s bought 950 long index futures and covered 7720 short Index futures position. FII’s Net Index futures position is 44867 (Short positions).

Pro’s sold 3211 long index futures and covered 5476 short index futures position. Pro’s Net Index futures position is 10576 (Short positions).

  • Options

FII’s sold 1681 long call options and added 64 short call options. Net call option positions in the index are 34234.

FII’s sold 7045 long put options and added 8044 short put options. Net put option positions in the index are 244220.

PRO’s bought 4351 long call options and covered 6790 short call options. Net call option positions in the index are –245802.

PRO’s bought 6929 long put options and added 11909 short put options. Net put option positions in the index are -95498.

Put call ratio for the current series is 0.92 PCR below .90 is bearish.

India VIX closed today at 15.92 VIX above 13 is bit cautious. VIX cooled 5.6% intraday.

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.

We saw good amount of put writing in the 10300 strikes since the major players are now writing put options at the lower levels.  Tomorrow we can expect good amount of volatility in the market. Major players will “roll over” their current month derivative positions to next month. We can expect short covering rally ahead of this.  However to confirm this as a trend reversal, index needs to close above 10430-10450 levels.

Nifty Technical Analysis

Close above the 10430-10450 levels will be bullish and close below 10270 – 10250 will be bearish for near term. Our long term trend is still bullish as long as we are holding to our previous swing low 10030.

Nifty closed near the 100 DMA and currently it is trading below the short term moving averages.

MACD still gives a sell signal.

RSI and Stochastic indicators show nifty is oversold currently.

Nifty Outlook

Tomorrow it’s the monthly derivative expiry day and we can expect good amount of volatility. We can expect fast movements on the both sides; 10300-10450 will be the expected range for tomorrow’s expiry. Short Strangle is the best strategy to implement on the expiry day. Smart traders can collect the premium by selling both put and call options easily. Positional traders wait for nifty to close above 10430-10450 levels or below 10270-10250 for the trend confirmation. Aggressive traders can take positions on close above mentioned levels on a 5 Mint chart and defensive traders can wait till the EOD for a clear picture. Also we need to analyze the next month roll over data to check whether the current month short positions been carry forwarded or not?


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