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Nifty continued its downward journey for the third day on the trot where it fell by 120 points to close at 15632 levels - HDFC Securities

F&O HIGHLIGHTS

SHORT BUILD UP WAS SEEN IN THE NIFTY & BANK NIFTY FUTURES

REMAIN CAUTIOUS TILL NIFTY CLOSES ABOVE 15800 LEVELS​​​​​​​

* Nifty continued its downward journey for the third day on the trot where it fell by 120 points to close at 15632 levels.

* Short build up was seen in Nifty Futures’ where Open Interest rose by 5% with Nifty falling by 0.76%

* Short build up was seen in Bank Nifty Futures’ too where Open Interest rose by 12% with Bank Nifty falling by 1.90%

* Nifty Open Interest Put Call Ratio fell further to an oversold level of 0.81 levels from 0.89 levels. Amongst the Nifty options (22-July Expiry), Call writing was seen at 15700-15750 levels, Indicating Nifty is likely to find resistance in the vicinity of 15700-15750 levels. On the lower side, support is seen around 15500 levels where we have seen Put writing.

* Short build up was seen by FIIS’ in the Index Futures segment where they net sold worth Rs 1785 Cr with their Open Interest going up by 10981 contracts.

To Sum It Up, short build up in the Bank Nifty Futures, short build up in the Nifty Futures, fall in the Nifty Open Interest Put Call ratio on the back of Call writing at 15700-15750 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 remain bearish and use pull back rally to prune long positions and wait for Nifty to close above 15800 level for building long positions. On the lower side 15500-15600 level will act as an immediate support where Puts have been written.

In the Bank Nifty, our advice is to remain bearish with stop loss of 35000 levels. On the lower side, support is seen in the vicinity of 33800-34000 levels.

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