FII FnO Data Analysis before crucial RBI meet on 24 Jan

By | January 24, 2012

Below is my Interpretation of FII OI data Sheet for 23-Jan-11.

 

1. FII  bought  12617  Contracts in NF worth 323.46  Cores in Index Futures with Open Interest increasing  by 27063 contracts.

2. As Nifty Future  was up  by 3  points and OI has increased today, with rise in price so FII have created fresh longs   in Index futures.Nifty moved in range of just 28 points and still FII created longs in NF. Nifty has lost momentum adn making grinding moves in tight range throughout the day before the crucial RBI meet today.

3. RBI will take decision on CRR rate cut today at 11 AM. Bank Nifty has risen almost 20% in month of January.This is what RBI said yesterday which means chances of rate cut are DIM but CRR cut can happen but will it be 25 BPS or 50 BPS.

The Reserve Bank of India (RBI) on Monday said weakening economic growth prospects would provide “some space for the monetary policy” to address the concerns amid slowing inflation. However, it was quick to add a rider that the two critical factors in rate actions ahead would be core inflation and the exchange rate pass-through.

Though headline inflation in December was at a two-year low and in line with the central bank’s projection of seven per cent by March-end, non-food manufacturing inflation remained high, reflecting input cost pressures. According to the central bank, moderation in the growth momentum and subdued international commodity prices are expected to ease the inflationary pressures in non-food manufactured products, though the pace of moderation will depend on exchange rate changes and its pass-through to domestic prices.

Always prepare for Worst Case Scenario What if NO RATE CUT than we will see a classic fall in market and If there is a 25 BPS hike than also Nifty can fall because news has factored in the market.

4. NF total Jan OI was at 1.55 cores with 19 Lakh liquidation  in  OI,this whole OI got rollovered to Feb series which saw an addition of 32 Lakhs in OI. Longs are getting rollovered .

5. FII total OI is Index Futures is 704300 which is highest from Nov Series ie. on 21 Nov FII OI was as high as 7 Lakh contract. FII are heavily loaded on long side any surprise by RBI can lead to fast fall in market if such huge position starts getting liquidated.

6. In Equity cash segment FII sold marginally 58.80  cores  whereas DII sold 438 cores. DII have sold 4000 cores in Jan Series which implies they are using rise to exit out of cash holdings.

7. Expiry is just 2 days away as 26 Jan is Holiday so will there be dramatic close for this series . Will Keep you posted All Eyes on RBI Governor.

8. As per Options data  5100 CE has  OI of  66  lakhs with addition of  3.6 lakh so now the golden ratio of 5067 has provided some relief to BEARS and 4900 PE has highest OI of 75 Lakhs.By end of expiry either 5100 will break or 4900. Guess is Yours 😉

9. FII for first time in Series Sold Options worth 692 cores with OI increasing by 29484. My Guess they are hedging themselves with writing ATM calls to cover there longs.

10. PCR has increase to 1.23 PCR above 1.3 leads to trending moves, so if we cross 5100 this week Bulls can make a killing in Expiry week.

11. FII SAR level  comes at  5038  and Nifty ATP for Dec series comes at 4845.

12. Bulls need to close above 5068 level tomorrow which will be a litmus test as it being 61.8% retracement of 4532-5400 as shown in below chart.

 

Buy above 5068  Tgt 5099,5130 and 5170

Sell below 5040 Tgt 5016,4998,4978 and 4966

All levels mentioned are SPOT levels.

Let me go by Disclaimer these are my personal views and trade taken on these observation should be traded with strict Sl

 

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