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Nifty Open Interest Put Call Ratio fell to 1.21 levels from 1.49 levels  - HDFC Securities

F&O HIGHLIGHTS

LONG UNWINDING IS SEEN IN THE NIFTY & BANK NIFTY FUTURES

REMAIN CAUTIOUS TILL NIFTY CLOSES ABOVE 16600; SUPPORT SEEN AROUND 16400

* Nifty fell more than 100 points from the intraday high on the back of negative Asian and European market cues and finally ended the day with the losses of 118.35 points to close at 16450.50 levels.

* Long unwinding was seen in Nifty Futures’ at higher levels, where Open Interest fell by 9% with Nifty falling by 0.71%

* Long unwinding was also seen in Bank Nifty Futures’, where Open Interest fell by 1.2% with Bank Nifty falling by 1.46%

* Nifty Open Interest Put Call Ratio fell to 1.21 levels from 1.49 levels. Amongst the Nifty options (26-August Expiry), Call writing was seen at 16500-16600 levels, Indicating Nifty is likely to find resistance in the vicinity of 16500-16600 levels. On the lower side, an immediate support is seen in the vicinity of 16400-16300 levels where we have seen Put writing.

* Long unwinding was seen by FIIS’ in the Index Futures segment where they net sold worth Rs 913 Cr with their Open Interest going down by 14863 contracts.

To Sum It Up, long unwinding in the Nifty and Bank Nifty Futures, Call writing at 16500-16600 levels and long unwinding by FIIs in the Index futures segment Indicates that one should remain cautious for the markets.

Therefore, our advise is to use any rally to prune long positions and wait for Nifty to close above 16600 levels for building aggressive long positions. On the lower side 16400-16300 level will act as an immediate support where Puts have been written.

In the Bank Nifty, our advice is to remain cautious with the stop loss of 34800 levels. On the lower side, support is seen in the vicinity of 34200-34500 levels.

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