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Market reversed early gains and closed near the day's low with modest losses on Wednesday - HDFC Securities

F&O HIGHLIGHTS

UNWINDING WAS SEEN IN THE NIFTY FUTURES​​​​​​​

CREATE SHORT POSITIONS ON RISES WITH TRAILING STOP LOSS OF 15800 LEVEL

* Market reversed early gains and closed near the day's low with modest losses on Wednesday. Traders were jittery ahead of Thursday's monthly F&O expiry on the NSE. The Nifty closed below the crucial 15,700 mark after hitting the day's high of 15,862.95 in initial deals. Barring the Nifty Auto index, all sectoral indices on the NSE ended in the red. Nifty finally closed down by 0.54% to 15686.95 level.

* Unwinding was seen in Nifty Futures’ where Open Interest fell by 3.01% with Nifty falling by 0.54%.

* Short build was seen in the Bank Nifty Futures, where we have seen 4.58% rise in the Open Interest with Bank Nifty falling by 0.49%.

* Nifty Open Interest Put Call Ratio fell to 0.96 levels from 1.08 levels. Amongst the Nifty options (24-June Expiry), Put writing was seen at 15500-15600 levels, Indicating support is seen around 15600 levels. On the higher side, resistance is seen in the vicinity of 15700-15800 levels where we have seen Call writing.

To Sum It Up, unwinding seen in Nifty futures, short build up in the Bank Nifty Futures, Put writing at 15500-15600 levels and Call writing at 15700 – 15800, Indicates that one should create short positions on rises.

Therefore, our advise is to create short positions on rises with the trailing stop loss of 15800 levels. On the lower side 15500-15600 levels will act as an immediate support where Puts have been written

In the Bank Nifty, our advice is to sell on rise with SL of 35000 levels. On the lower side, resistance is seen in the vicinity of 34500-34000 levels.

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