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Short covering was seen in Nifty Futures` where Open Interest fell by 2% - HDFC Securities

F&O HIGHLIGHTS

SHORT COVERING WAS SEEN IN THE NIFTY & BANK NIFTY FUTURES

GO LONG WITH THE STOP LOSS OF 14400 LEVELS

* Nifty recouped some of the losses of Monday where it ended the day with the gains of 194 points to close at 14505 levels

* Short covering was seen in Nifty Futures’ where Open Interest fell by 2% with Nifty rising by 1.36%.

* Short covering was seen in the Bank Nifty Futures too, where we have seen 8% fall in the Open Interest with Bank Nifty gained by 3.2%.

* Nifty Open Interest Put call Ratio rose sharply to 1.15 levels from 0.88 levels. Amongst the Nifty options (15-April Expiry), Put writing was seen at 14400-14500 levels, Indicating 14400 level will act as a strong support. On the higher side, resistance is seen in the vicinity of 14700- 14800 levels where we have seen Call writing.

* Short covering was seen by FIIS’ in the Index Futures segment where they net bought worth Rs 1995 Cr with their Open Interest going down by 2961 contracts.

To Sum It Up, Short covering in the Nifty and Bank Nifty Futures, rise in the Nifty Open Interest Put Call Ratio on the back of Put writing at 14400-14500 levels and short covering by the FIIs’ in the Index Futures segment Indicates that one should be optimistic for the markets Therefore, our advise is to be bullish and accumulate long positions with the trailing stop loss of 14400 levels.

On the higher side 14700-14800 level will act as an immediate resistance where Calls have been written In the Bank Nifty, where we have seen first sign of short covering, our advice is to accumulate long positions with the trailing stop loss of 31500 levels. On the higher side, resistance is seen in the vicinity of 32500-33000 levels.

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