Recently in the first and second week of the month of September’17, the Nifty had opened above its previous day’s low in lieu of the adverse indications from the international stock exchanges. The Nifty index even after opening at a low of more than 50 points, it further continued to go even lower in the initial trades.
A sigh of relief was felt when a slight recovery in the later half was observed, but the Nifty clipped some of its intraday losses and finally ended it all with announcing a loss of 0.36% as compared to its previous figure.
Nifty index viewed an incredible and outstanding performance from the Midcap space because some of the stocks brought in a good amount of long positions. They were found to be Equitas, Muthoot Finance, Indo Count Industries, Mahanagar Gas and JustDial. Some if the companies that added decent enough short positions were ITC, IDEA, PNB, Godrej Consumer Products, Cadila Healthcare and Union Bank.
Talking about the nifty option chain activity, the fresh build-up was seen to be in 9,800, 9,900, 10,000 and 10,500 call options. The 9900 and 9600 put options brought in a huge position which was followed by the slowdown in 10,000 strikes. In the nifty call put, the highest open interest or OI in the current series is placed at 10,000 Call and 9,700 Put options.
FII’s or the Foreign institutional investors kept their sale on in the segment of cash market for yet another day. They curbed liquidity to the tune of Rs. 3,435 Cr in just four trading sessions of the month of September. The FII’s also sold equities which had a whopping value of around Rs. 16,000 Cr in the month of August of this year. This figure was their biggest monthly selling figure since last year November 2016.
Despite witnessing an intraday pull-back, the Foreign institutional investors begun short positions in the index future to the tune of Rs. 763 Cr. If we look at the last four sessions, the FIIs collectively shorted more than 28,000 contracts in index futures in the month of September this year.
This led to their ‘Long Short Ratio’ to decrease substantially. Their ‘Long Short Ratio’ decreased to 63.70 % from 71.40 %. Also, it was observed that they have bought a decent amount of index put options in the current series. At the present stage, the Option data is hinting an ongoing consolidation phase of 9,700 – 10,040 in upcoming sessions too.
Looking at the constant negative bets from the FIIs, it surely does not augur well for the Bulls. Hence, the traders are suggested to keep their calm and remain light on their positions. It may happen that in near future they get to see another round of profit booking from the upper end of the given phase.
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