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Nifty Open Interest Put Call ratio fell to 0.86 from 1.28 level -  HDFC Securities

F&O HIGHLIGHTS

LONG UNWINDING IS SEEN IN THE NIFTY & BANK NIFTY FUTURES

ACCUMULATE LONGS ON DECLINE WITH THE STOP LOSS OF 17200 LEVELS​​​​​​​

* Nifty ended with deep losses on Monday. The Nifty opened with strong gains and hit the day's high of 17,639.50 in morning trade. However, profit selling dragged the index lower in early afternoon trade and it finally settled below the 17,400 mark. Barring the Nifty IT index, all the sectoral indices on the NSE ended in the red. Realty, oil & gas and PSU banks witnessed major selling. Nifty Finally closed down by 143.05 points at 17368.25. Nifty futures is trading at 78.60 points premium.

* Winding up of long positions was seen in the Nifty Futures where Open Interest fell by 2.33% with Nifty falling by 0.82%.

* Winding up of long positions was also seen in the Bank Nifty Futures where Open Interest fell marginally by 0.36% with Bank Nifty falling by 0.49%.

* Nifty Open Interest Put Call ratio fell to 0.86 from 1.28 level. Amongst the Nifty options (16-Dec Expiry), Put writing is seen at 17200 levels, Indicating Nifty is likely to find support in the vicinity of 17200 - 17300 levels. On the higher side, an immediate resistance are seen in the vicinity of 17500 - 17600 levels where we have seen Call writing.

* Short built up was seen by FIIS’ in the Index Futures segment where they net sold worth Rs 946 Cr with their Open Interest going up by 8079 contracts.

To Sum It up, Long unwinding in the Nifty futures & Bank Nifty Futures and Call writing at 17500 levels Indicatesthat Indicatesthat one should be bearish up to 17200 - 17300 levels.

Therefore, our advise is to accumulate longs near 17300 levels with the stop loss of 17200 levels. On the higher side 17500 - 17600 levels will act as a strong resistance.

In the Bank Nifty, our advice is to go long on dips near 36500 with trailing SL of 36000 levels. On the higher side 37000 – 37500 level may act as resistance going forward.

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