Wednesday, May 13, 2015

13-05-2015

Nifty Opened with a Huge gap on upside and started to show more bullishness in first 15 min of trade. Once it reached its golden ratio retrace levels around 8250-52 zone; higher trade frequency used it to short it from there with a low risk reward set-up. It fell to test the Previous Day low at 8115-8110 zone. Responsible buyers emerged at 8100-120 zone to take nifty again back above 8200. Huge Intra movement was seen today, thanks to VIX. Now the Weekly Trend has turned NEUTRAL to BULLISH with EOD close at 8235.45 with gain of 108.50 points.

Broader Market was slightly positive with 974 Advances and 499 Declines for the day. 200 Day Moving average is at 8289-93 zone; Nifty is trying to come back and touch 200 Day Moving Avg. Bulls will breath easy only when they take NIFTY above this and stay there for atleast 3+ days. 

Now Lets Look at how Open interest is aligned:

FII have taken Longs and good amount of Short in Index futures; signalling they are still seeing this rally a corrective one. In cash they are Net Sellers today

In Options -- Net on Net still they are negative; looks like they are in no mood to cover either their Puts nor their Short calls. 

DII have also added up in short side but they are still long in Cash, so I am seeing this action as their hedging strategy. They must have taken at higher levels today; so system is holding more shorts. 

Clients have used this up and down movement to cover their longs and shorts, but still they are net longs in Index futures. 

In Options -- yesterday's classic move proved rite; they covered their CE longs which they took at yesterdays bottom and also they covered their short calls..Today they have Bought in PE's and hedged it with short PEs.. don't be surprised to see one more fall like the one today :P 

Pro desk -- Aggressive short built up yesterday in Index futures were covered not all, but some. They have taken exposure on long side today. Net OI increasing. 

In Options -- they are net to net longs, may be they are expecting to be a green day tomorrow. 

Inference/Open Interest -- All in All, its again a perfect competition Pro/DII are somewhat seeing a good green day tomorrow; while FII are Bearish though they have long exposure today and Clients are playing good games in options more than Futures.. 

Key Levels to watch for 13-05-2015 -- 8280 Day 5 High EMA and 8293 R1 .. bulls need to scale 8293 for the confirmation of today's Gap and positive close.  Supports  8208 Day 5 close EMA and below that 8192 Pivot for the day.. So again we are seeing a 100 point range 8192---8293..

Trade Cautiously when VIX is higher; keep stops at proper zones; else it will be eaten up..

Happy Trading.

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