Below is my Interpretation of FII OI data Sheet for 4-Jan-11.
1. FII sold 6528 Contracts in NF worth 148 Cores in Index Futures with Open Interest increasing by 17730 contracts.
2. As NF was down by 23 points and OI has increased today, As price was down marginally and FII were sellers so i am coming to conclusion they shorted more at higher level. To add to my fact is Nifty is unable to cross the resistance of 4800. It made 3 attempt today 4773,4781 and 4783 and all were sold off. So means selling pressure is coming to higher end.
3. Today trade in NF was quiet irritating and frustrating to most of traders as it was just trading in tight range of 30 points thorugh out the day barring the fall we saw from 4799-4750 in matter of 15 mins which is very difficult to catch. Well after the Big rise we saw yesterday in tune of 136 points this move was quiet acceptable as consolidation is always required before making the next move.
4. Today’s session eventhough Nifty closed in red but Bulls were real winner as they were able to protect the 20 SMA@4725. Technically today is second close above 20 SMA and it signify bulls are preparing ground to break the elusive level of 4840.
5. Today’s choppy session was on volumes 3.5 Lakh NF .Total turnover is just 86.4 K cores. So lot of selling at higher levels got absorbed at lower levels looking at both volumes and Turnover.
6. NF total OI was at 2.07 cores with 97 k lakh liquidation in OI with fall in price means longs were liquidated in NF .
7. In Equity cash segment FII bought 138 cores whereas DII sold 83 cores.
8. As per Options data 5000 CE has highest OI of 50 lakhs addition of 2.5 lakh and 4500 PE has highest OI of 62 Lakhs addition of 4.3 Lakh. 4.3 lakh fresh addition is shorts in 4500PE. So 4500 looks like a good support for market for time being.
9. 4700 PE has added another 4 lakhs in OI so total of 21 lakh in 2 days which make me belive 4700 is base or support for market in immediate near term.
10. 5100 CE has seen an addition of another 2 Lakhs in OI so in total 8 lakh in past 2 trading session
11. FII have bought Options today worth 332 cores with net OI addition of 39k so they have not booked any profit and added more Call Options in there Kitty.
Implied Volatility of 5100 CE is 21 and most of call options 21-24 so low volatility always favour buying calls and if you see in PE IV are in range of 28-33.
12. FII SAR level comes at 4692. Keep this level as SL for positional longs.
13. On Upside above above 4783 Nifty Tgt 4810,4840 and 4881.
14. On dowside below 4725 Nifty Tgt 4696, 4676 and 4650(Nifty Spot Level)
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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