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Nifty Open Interest Put Call ratio fell to an oversold level of 0.91 levels from 1.23 levels - HDFC Securities

F&O HIGHLIGHTS

LONG UNWINDING IS SEEN IN THE NIFTY AND BANK NIFTY FUTURES

STRONG SUPPORT IS SEEN IN THE VICINITY OF 18000-18100 LEVELS​​​​​​​

* Nifty continued its downward journey for the second day in the row and finally ended the day with the losses of 152 points to close at 18267 levels.

* Long unwinding is seen in the Nifty Futures where Open Interest fell by 4% with Nifty falling by 0.83%.

* Long unwinding is seen in the Bank Nifty Futures also where Open Interest fell by 8% with it falling by 0.06%.

* Nifty Open Interest Put Call ratio fell to an oversold level of 0.91 levels from 1.23 levels. Amongst the Nifty options (21-Oct Expiry), Put writing is seen at 18000-18100 levels during last few days, Indicating Nifty is likely to find support in the vicinity of 18000 - 18100 levels. On the higher side, an immediate resistance is seen in the vicinity of 18400 - 18500 levels where we have seen Call writing.

* Short build up is seen by FIIS’ in the Index Futures segment where they net sold worth Rs 298 Cr with their Open Interest going up by 1709 contracts.

To Sum It up, Long unwinding in both Nifty and Bank Nifty Futures, Fall in the Nifty Open Interest Put Call ratio on the back of Call writing at 18400 - 15400 levels and short build up by the FIIs in the Index Futures segment Indicates that one should be cautious for the markets.

Therefore, our advise is to use any rally to prune long positions and wait for Nifty to close above 18500 level for building aggressive long positions.. On the lower side 18000- 18100 levels will act as a strong support.

In the Bank Nifty, our advice is to go long with trailing SL of 39000 levels. On the higher side 39800-40000 level may act as resistance going forward

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