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Nifty Open Interest Put Call ratio fell sharply to 1.22 levels from 1.56 levels -  HDFC Securities

F&O HIGHLIGHTS

LONG UNWINDING IS SEEN IN THE NIFTY AND BANK NIFTY FUTURES

ACCUMULATE LONGS ON DECLINE WITH THE TRAILING STOP LOSS OF 17500 LEVELS​​​​​​​

* Nifty broke the four day winning streak on the back of negative global cues and ended the day with the losses of 179 points or 1% at 17746 levels.

* Long unwinding is seen in the Nifty Futures where Open Interest fell by 2% with Nifty falling by 1%.

* Long unwinding is seen in the Bank Nifty Futures too where Open Interest fell by 3.4% with Bank Nifty falling by 0.55%.

* Nifty Open Interest Put Call ratio fell sharply to 1.22 levels from 1.56 levels. Amongst the Nifty options (13-Jan Expiry), Put writing is seen at 17500-17600 levels, Indicating Nifty is likely to find strong support in the vicinity of 17500 - 17600 levels. On the higher side, an immediate resistance is seen in the vicinity of 17900-18000 levels where we have seen Call writing.

* Long unwinding is seen by FIIS’ in the Index Futures segment where they net sold worth Rs 3013 Cr with their Open Interest going down by 14945 contracts.

To Sum It up, Long unwinding in the Nifty and Bank Nifty futures(No fresh short build up) and Put writing at 17500-17600 levels Indicates that downside is limited in the markets.

Therefore, our advise is to use any decline from hereon to accumulate longs with the stop loss of 17500 levels. On the higher side 17900 - 18000 levels will act as a strong resistance.

In the Bank Nifty, which outperformed the Nifty yesterday, our advice is to go long on dips with SL of 37000 levels. On the higher side 38000- 38200 level may act as resistance going forward.

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