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Nifty opened sharply higher on Monday on the back of strong global cues - HDFC Securities

F&O HIGHLIGHTS

SHORT COVERING WAS SEEN BY FIIS IN THE INDEX FUTURES SEGMENT

REMAIN BULLISH WITH THE TRAILING STOP LOSS OF 15600 LEVELS

* Nifty opened sharply higher on Monday on the back of strong global cues. However it witnessed profit booking at higher levels where it fell 100 points from the intraday high and finally ended the day with the minor gains of 3 points to close at 15693 levels.

* Profit booking was seen in Nifty Futures’ at higher levels where Open Interest fell by 2% with Nifty fell 100 points from the high

* Profit booking was seen in the Bank Nifty Futures too at higher levels, where we have seen 0.04% fall in the Open Interest with Bank Nifty rising by 0.4%.

* Nifty Open Interest Put Call Ratio fell further to 0.87 levels from 0.94 levels. Amongst the Nifty options (15-July Expiry), Call writing was seen at 15800-15900 levels, Indicating Nifty is likely to find resistance in the vicinity of 15800-15900 levels. On the lower side, support is seen around 15650-15700 levels where we have seen put writing earlier.

* Short covering was seen by FIIS’ in the Index Futures segment where they net bought worth Rs 719 Cr with their Open Interest going down by 2871 contracts.

To Sum It Up, Short covering by the FIIS’ in the Index futures segment and an oversold PCR and Put writing at 15600-15700 levels during the last few days 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 34700 levels. On the higher side, resistance is seen in the vicinity of 35500-35700 levels.

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