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Nifty rose sharply on the back of strong global cues on the first day - HDFC Securities 

F&O HIGHLIGHTS

SHORT COVERING WAS SEEN IN THE NIFTY & BANK NIFTY FUTURES

BUY ON DECLINE WITH STOP LOSS OF 14700

* Nifty rose sharply on the back of strong global cues on the first day of the new financial year to end the day with the gains of 177 point to close at 14867 levels.

* Short covering was seen in Nifty Futures’ where Open Interest fell by 7% with Nifty rising by 1.2%.

* Massive short covering was seen in the Bank Nifty Futures, where we have seen 27% fall in the Open Interest with Bank Nifty rising by 1.7%.

* Nifty Open Interest Put call ratio has risen to 1.16 levels from 1.10 levels. Amongst the Nifty options (08-Ap Expiry), Put writing was seen at 14600-14700 levels, Indicating 14700 level will act as a strong support. On the higher side, resistance is seen in the vicinity of 15000-15100 where we have seen Call writing

* Short covering was seen by FIIS’ in the Index Futures segment where they net bought worth Rs 445 Cr with their Open Interest going down by 4965 contracts.

To Sum It Up, Short covering in the both Nifty and Bank Nifty Futures, rise in the Nifty Open Interest Put Call ratio on the back of Put writing at 14600-14700 levels and short covering by the FIIs’ in the Index Futures segment Indicates that one should remain optimistic for the markets Therefore, our advise is remain bullish and accumulate long positions with the stop loss of 14700 levels.

On the higher side 15000 level will act as a resistance where Calls have been written In the Bank Nifty, our advice is to remain bullish and accumulate long positions on decline with the stop loss of 33300 levels. On the higher side, resistance is seen in the vicinity of 34000-34200 levels.

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