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Nifty rebounded after two days of relentless selling and closed near the day's high - HDFC Securities

F&O HIGHLIGHTS

LONG BUILT UP WAS SEEN IN THE FII’S IN THE INDEX FUTURES

ACCUMULATE LONGS ON DECLINE WITH THE STOP LOSS OF 17100 LEVELS​​​​​​​

* Nifty rebounded after two days of relentless selling and closed near the day's high. The rally was backed by strength in banks, metals and IT stocks, which corrected in recent sessions. All the sectoral indices on the NSE ended in the green. Shares rallied across the globe amid hopes that the Omicron variant of the coronivirus would be mild. Nifty Finally closed up by 264.45 points at 17176.70.

* Short covering was seen in the Nifty Futures where Open Interest fell by 1.52% with Nifty rising by 1.56%.

* Short covering was also seen in the Bank Nifty Futures where Open Interest fell by 8.90% with Bank Nifty rising by 2.47%.

* Nifty Open Interest Put Call ratio rose to 0.97 from 0.71 level. Amongst the Nifty options (09-Dec Expiry), Put writing is seen at 17000 levels, Indicating Nifty is likely to find support in the vicinity of 17000 - 17100 levels. On the higher side, an immediate resistance are seen in the vicinity of 17400 - 17500 levels where we have seen Call writing.

* Long built up was seen by FIIS’ in the Index Futures segment where they net bought worth Rs 2300 Cr with their Open Interest going up by 3523 contracts.

To Sum It up, Short covering in the Nifty futures & the Bank Nifty Futures and Put writing at 17000 levels Indicatesthat Indicatesthat one should be optimistic for the markets

Therefore, our advise is to accumulate longs on dips with the stop loss of 17100 levels. On the higher side 17400 - 17500 levels will act as a strong resistance.

In the Bank Nifty, our advice is to go long on dips with trailing SL of 36000 levels. On the higher side 37000 - 37500 level may act as resistance going forward.

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