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Nifty outlook:  

The bearish engulfing candle of yesterday keeps the default target as 18200 or even 18066. However, the bulk of the losses having unfolded in the final two hours, expect a mean reversion to VWAP. This could dilute the bearish momentum, and rekindle hopes of 18579-650 again, should early trades manage to float above 18300. But it would be prudent to wait for a break beyond 18327.

Derivative:

Nifty weekly contract has highest open interest at 18400 for Calls and 18300 for Puts while monthly contracts have highest open interest at 18500 for Calls and 18000 for Puts. Highest new OI addition was seen at 18400 for Calls and 18150 for Puts in weekly and at 18400 for Calls and 17950 for Puts in monthly contracts. FIIs increased their future index long position holdings by -74.73%, increased future index shorts by -70.76% and in index options by 705.65% in Call longs, 587.74% in Call short, 1184.28% in Put longs and 804.18% in Put shorts.   

USD-INR outlook:

Upside momentum has slipped away. Look for dips to re enter longs. Expect sideways moves while in the 82.20 vicinity. Major falls are less expected as long as 82.09 holds.

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