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Nifty fell 38 points on Friday on the back of weak global cues - HDFC Securities

F&O HIGHLIGHTS

SHORT COVERING WAS SEEN IN THE NIFTY FUTURES

REMAIN BULLISH WITH THE TRAILING STOP LOSS OF 15600 LEVELS​​​​​​​

* Nifty fell 38 points on Friday on the back of weak global cues. However from intraday low it recovered more than 50 points to close at 15690 levels.

* Short covering was seen in Nifty Futures’ from lower levels where Open Interest fell by 3% with Nifty future premium expanded to 33 points from 8 points.

* On the other hand, Long build up was seen in the Bank Nifty Futures from lower levels, where we have seen 3% rise in the Open Interest with Bank Nifty rising by more than 200 points from the low.

* Nifty Open Interest Put Call Ratio fell to an oversold level of 0.94 levels from 1.06 levels. Amongst the Nifty options (15-July Expiry), Put writing was seen at 15600-15700 levels, Indicating Nifty is likely to find support in the vicinity of 15600-15700 levels. On the higher side, resistance is seen around 15900 levels where we have seen call writing.

* Short build up was seen by FIIS’ in the Index Futures segment where they net sold worth Rs 450 Cr with their Open Interest going up by 642 contracts.

To Sum It Up, Long build up in the Bank Nifty Futures from lower levels, Short covering in the Nifty Futures, an oversold level of PCR and Put writing at 15600-15700 levels in weekly Options Indicates that one should remain optimistic for the markets.

Therefore, our advise is to remain bullish with the trailing stop loss of 15600 levels. On the higher side 15800-15900 level will act as an immediate resistance where Calls have been written.

In the Bank Nifty, our advice is to accumulate longs on decline with the stop loss of 34500 levels. On the higher side, resistance is seen in the vicinity of 35500-35800 levels.

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