Below is my Interpretation of FII OI data Sheet for 21 Dec.
1. FII bought 66,654 Contracts in NF worth 1494 Cores in Index Futures with Open Interest decreasing sharply by 49496 contracts.
2. As NF was up by 170 points with Open Interest decrease by FII . Fall in OI with fall in price means huge shorts were covered by FII.
3. Let me share an interesting Observation If we zoom to start of series ie. On 25 Nov NF closed at 4710.95 and FII OI was 532860 Today ie. 21 Dec NF closed at 4711.50 with FII OI at 480510 ,so in 18 Trading sessions Nifty Futures have done nothing only a .60 Point gain 🙂 but with very high volatility
During the whole 18 trading session FII OI has reduced by 52350 and total Contracts bought are just 746 as FII have roll overed shorts in from November to December i am assuming they are covering there positions as they would be leaving for Holidays from 24 Dec which adds logic to our view.
It also means that we might have set up a panic bottom at 4538 for December series as per above logic.
4. Today rise was not on largish volumes total contract traded were 504,015 so as such it was a short covering rally only.
5. NF total OI was at 1.7 cores with 21lakh reduction ie. almost 18% means traders who took short bet on anticiaption of a continuation of decline in market got nervous seeing the sharpness and swiftness of rally and have just liquidated there bets, The last 30 mins fast rise is attributed to panic short covering.
During the whole 18 trading session Nifty Futures OI has reduced by 4682550 which means shorts are getting covered in NF also.
6. In Equity cash segment FII sold 144 cores whereas DII were also seller of 133 cores. Now question is mid comes who bought today were it retailers or HNI.
Well my perceptive is equity buying/selling is delayed cycle to the FnO cycle meaning first FII buy in futures than induce a rally in equity with heavy buying one or two days than starts liquidating there Futures longs. So as such today Rally was backed by short covering only,
7. As per Options data 5100 CE has highest OI of 78 lakhsand 4500 PE has highest OI of 74 Lakhs.
8. 4300 PE has again added 3 lakh in OI yesterday also it added 3.2 lakhs so 6.2 lakhs in OI in past 2 days where FII were sellers in Index options so i am assuming it was put writing which is happening at 4300 PE.
9. Liquidation was seen in 4500-4800 CE of 35 lakhs as Call writers were running for cover .
10. FII SAR level comes at 4619,Keep an eye on this level tomorrow.
11. Average Traded Price for NF is 4851 for December series which becomes the potential resistance for further upmove.
12. Market sentiments have turned overtly bearish and Nifty making low each passing day. There will be sharp and swift rally in a single day looking at fresh addition in 4800 CE. Bear markets rallies will be sharp and swift,today we got indications with price falling but volumes are not supporting.–This we mentioned yesterday and NF oblized us today only, i hope traders took advantage of the rally
13. Till Nifty do not close above 4756 stick with positional shorts,as it was Nifty expiry levels for November series.
14. On Upside above above 4707 Nifty Tgt 4720,4756,4798 and 4831.
15. On dowside below 4665 Nifty Tgt 4628 ,4612 and 4562 (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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