Below is my Interpretation of FII OI data Sheet for 05 Dec.
Let me go by Disclaimer these Observation should not be used as Trade recommendation in NF
1. FII sold 9107 Contracts in NF worth 216 Cores in Index Futures with Open Interest Increasing by 25487 contracts.
2. FII has booked profits in longs they are holding before Holiday as these days holidays can be lethal to trading account looking at big gap up we have seen in few instances.
3. As NF was down by just 8 points Fall In Price with rise in Open Interest means FII has booked profits in NF .
4. For December Series FII are still long in 96K contract of NF.
5. Nifty formed an inside day on Monday making way for range breakout in tommrow trading session above 5062 or below 5002
6. It has been 2 days in a row NF gave closing above 50 SMA which is bullish from short term perspective.
7. In Equity cash segment 4 day in a row they were buyers worth 146 cores whereas DII were buyers in samll amount of 37 cores.
8. As per Options data 5100 CE has highest OI of 61 lakhs and 4700 PE has highest OI of 84 Lakhs. 80 Lakhs OI reached with just 7 days in series means market participants are confident of holding 4640 as bottom and PCR trading at lower end of 0.84 means still we have few steam left in the current rally
9. NF total OI is 2.22 Cores with fresh addition of 5.7 Lakhs i am interpenetrating its as fresh long addition in morning when Nifty dipped till 5022 which was 50 SMA for the day hence traders missing the rally are using dips to enter longs.
10. Total Number of call Written are 26 lakhs and total Puts written are 8 lakhs meaning traders are still not confident on rallies for further upside,as we approach the crucial resistance zone of 5080-5160.
11. FII NF SAR ie. Stop and Reverse is at 4998. This should be ideal stop loss for all Longs as below this levels we will revisit 4973 and 4930 levels.
12. On Upside above 5100 NF we will trade till 5130,5160 NF looking at FII data.
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This part of analysis is always confusing for me and sometimes err along this path.This article has cleared some concepts about it.Hope you keep writing it as this an excellent tool for judging the trend apart from technicals.
Kirtan B Raut
Thanks a Lot Sir!!
Price is Supreme 🙂
No i did not understand it from todays move. How can u prove that todays move is related with f&o data. W. Are u trying to say todays 20-30 fall in nifty is related with f&o. Dude, we are not near to expiry date.
Anyway, my question was academic and i was expecting similar kind of answer.
Why market direction prediction is driven by option sellers?? Why can not we say, 5100CE has highest OI which means majority have bought options and expect market to rise.
Hope you understood it after todays market action