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Nifty Open Interest Put Call ratio fell to 0.91 levels from 0.92 levels -  HDFC Securities

F&O HIGHLIGHTS

LONG BUILD UP IS SEEN IN THE BANK NIFTY FUTURES

REMAIN BULLISH WITH THE STOP LOSS OF 17200 LEVELS​​​​​​​

* Nifty broke the two day losing streak on Monday on the back of strong global cues, where it rose by 238 points or 1.39% to close at 17340 levels.

* Short covering is seen in the Nifty Futures where Open Interest fell by 10% with Nifty rising by 1.39%.

* On the other hand, Long build up is seen in the Bank Nifty Futures where Open Interest rose by 3% with Bank Nifty rising by 0.76%.

* Nifty Open Interest Put Call ratio fell to 0.91 levels from 0.92 levels. Amongst the Nifty options (03-Feb Expiry), Put writing is seen at 17300 levels, Indicating Nifty is likely to find strong support in the vicinity of 17200-17300 levels. On the higher side, an immediate resistance is seen in the vicinity of 17400-17500 levels where we have seen Call writing. 

* Short covering is seen by FIIS’ in the Index Futures segment where they net bought worth Rs 1295 Cr with their Open Interest going down by 9485 contracts.

To Sum It up, Short covering in the Nifty Futures, Long build up in the Bank Nifty futures, Put writing at 17300 levels Indicates that one should remain optimistic for the markets.

Therefore, our advise is to accumulate longs with the stop loss of 17200 levels. On the higher side 17400-17500 level will act as a resistance where we have seen Call writing. Any close above 17500 level would result into further short covering which might push Nifty to even 17650-17700 levels

In the Bank Nifty, where we have seen long build up yesterday, our advice is to accumulate longs with the stop loss of 37000 levels. On the higher side 38800-39000 level will act as a resistance.

Higher VIX Indicates that market is expecting higher volatility on the day of budget. Follow our recommendations during the day as budgetary announcement may change the trend of the market either side.

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