FII Activity: Bearish Sentiment in Nifty Index Futures
Foreign Institutional Investors (FIIs) continue to maintain a bearish stance in the Nifty Index Futures market, actively shorting 2,680 contracts worth ₹461 crore. This activity resulted in an increase of 4,786 contracts in net open interest, signaling fresh short positions being built rather than just rollovers.
Breaking Down FII Activity
- FIIs added 3,711 long contracts, slightly increasing bullish exposure.
- FIIs added 6,084 short contracts, reinforcing their bearish outlook.
Client Behavior
- Clients covered 1,027 long contracts, indicating profit booking or reducing bullish bets.
- Clients added 1,536 short contracts, suggesting a cautious approach towards further downside risk.
Current Positioning in Index Futures
- FIIs: Holding 15% long and 85% short positions → Maintaining a strong bearish bias.
- Clients: Holding 71% long and 29% short positions → Maintaining an optimistic market outlook.
Market Outlook & Key Takeaways
✔ FIIs continue to add shorts aggressively, showing a lack of confidence in upside momentum.
✔ Clients remain on the bullish side, but the covering of long positions suggests some caution.
✔ With FIIs maintaining 85% short positions, any positive trigger could force short-covering, leading to a sharp upside move.
✔ A break below key support levels could accelerate selling pressure, aligning with FII’s bearish stance.
Nifty reacted sharply to Mars Declination, leading to a significant decline, reinforcing the theme that 2024 is the Year of Mars, where any major Mars astro event triggers big market moves.
Now, price is nearing its Gann angle support zone and the psychological level of 23,000, making this a critical area to watch for potential reversal signs.
Key Levels to Watch
Support Zone: 23,000 (Psychological Level) & Gann Angle Support
Resistance Zone: 23,200–23,222 → A strong supply zone for any rebound attempt.
Important Lunar Events Tomorrow – Reversal on the Cards?
- Tomorrow, we have two key lunar events, as discussed in the video below, which could influence market sentiment.
- Reversal Signal: If Nifty trades above the first 15-minute high, it could indicate a potential trend change.
Mid & Small Caps Hit Hard – Panic Selling Seen
- Today’s fall was more painful in mid & small-cap stocks, with many seeing panic-driven selling.
- This could be a short-term shakeout, but traders should watch for stabilization signs before taking fresh positions.
Market Outlook & Trading Strategy
✔ If 23,000 holds, a reversal could play out, especially with lunar events aligning.
✔ A move above 23,200–23,222 could confirm bullish momentum.
✔ If Nifty remains weak below 23,000, more downside pressure could build.
Final Thoughts: The market remains highly volatile, with astro cycles and technical levels aligning for a potential turning point. Watch the first 15-minute price action closely!
Nifty formed a perfect Doji at the Gann angle support zone, aligning with multiple lunar dates, as discussed in the video below. This signals potential indecision in the market, setting the stage for a major move.
Key Levels to Watch
Bullish Scenario:
- A move above 23,135 will confirm a double bottom & trend reversal.
- If sustained, expect an upside move towards 23,251/23,326.
Bearish Scenario:
- Bears will regain control below 22,949, potentially leading to further downside.
Expiry Day Impact – Expect High Volatility
With Weekly expiry tomorrow, traders should be prepared for sharp swings, as positions get adjusted.
Market Outlook & Trading Strategy
✔ Watch for confirmation above 23,135 for a bullish breakout.
✔ If 22,949 breaks, expect another round of selling pressure.
✔ Stay cautious, as expiry-driven volatility could create sudden reversals.
Watch the video below for a detailed analysis
Nifty Trade Plan for Positional Trade ,Bulls will get active above 23135 for a move towards 23237/23313. Bears will get active below 23007 for a move towards 22931/22854/22778.
Traders may watch out for potential intraday reversals at 09:15,11:45,12:15,02:00 How to Find and Trade Intraday Reversal Times
Nifty December Futures Open Interest Volume stood at 1.75 lakh cr , witnessing addition of 3.3 Lakh contracts. Additionally, the increase in Cost of Carry implies that there was addition of SHORT positions today.
Nifty Advance Decline Ratio at 26:24 and Nifty Rollover Cost is @23879 closed below it.
Nifty Gann Monthly Trade level :23529 closed below it.
Nifty has closed below its 20 SMA @ 23298 Trend has changed to Buy On Dips till above 22900
Nifty options chain shows that the maximum pain point is at 23000 and the put-call ratio (PCR) is at 0.85.Typically, when the PCR open interest ranges between 0.90 and 1.05, the market tends to remain range-bound.
Nifty 50 Options Chain Analysis
The Nifty 50 options chain indicates that the highest open interest (OI) on the call side is at the 23100 strike, followed by 23300 strikes. On the put side, the highest OI is at the 22900 strike, followed by 22800 strikes. This suggests that the market participants are expecting Nifty 50 to remain range between 22900-23300 levels.
Retail & FII Activity in the Options Market – Key Insights & Market Outlook
Analyzing retail and FII positioning in the options market provides valuable insights into market sentiment and potential price movements. Here’s a breakdown of today’s activity:
Retail Activity in Options Market
Retail traders displayed a slightly bearish stance, with a stronger focus on put options compared to calls.
Call Options:
- Added 141K contracts, suggesting some bullish bets.
- Shorted 77K contracts, indicating expectations of resistance at higher levels.
Put Options:
- Added 359K contracts, signaling strong downside hedging.
- Shorted 270K contracts, suggesting confidence that key support levels will hold.
Retail Takeaway:
Retail traders are positioning cautiously, with heavier put activity suggesting some bearish sentiment but also a belief that major support levels will hold.
FII Activity in Options Market
FIIs leaned slightly bearish, with notable call shorting and minor unwinding in puts.
Call Options:
- Added 18.6K contracts, showing limited bullish intent.
- Shorted 31.7K contracts, reinforcing resistance at higher levels.
Put Options:
- Covered 18.9K contracts, reducing some downside hedging.
- Covered 3.9K contracts, further reducing put positions.
FII Takeaway:
FIIs are not aggressively adding puts, but their call shorting suggests a lack of bullish conviction. They expect resistance at higher levels but are not fully committed to a downside move.
Market Outlook & Key Takeaways
✔ Retail traders are hedging against downside risks but are also shorting puts, indicating some confidence in support levels holding.
✔ FIIs are showing a cautious stance, reducing put positions but shorting calls, signaling expectations of a range-bound or downward move.
✔ If key support levels hold, the put shorting could trigger a sharp bounce.
✔ If resistance remains strong, call shorting by FIIs may keep upside moves in check.
In the cash segment, Foreign Institutional Investors (FII) sold 4969 Cr , while Domestic Institutional Investors (DII) bought 5929 cr.
Traders who follow the musical octave trading path may find valuable insights in predicting Nifty’s movements. According to this path, Nifty may follow a path of 22751-23408-24105-24801 This means that traders can take a position and potentially ride the move as Nifty moves through these levels.Of course, it’s important to keep in mind that trading is inherently risky and market movements can be unpredictable.__ Price took support near 22751
When you really believe that trading is simply a probability game, concepts like right or wrong or win or lose no longer have the same significance.” – Mark Douglas
For Positional Traders, The Nifty Futures’ Trend Change Level is At 23498. Going Long Or Short Above Or Below This Level Can Help Them Stay On The Same Side As Institutions, With A Higher Risk-reward Ratio. Intraday Traders Can Keep An Eye On 23072, Which Acts As An Intraday Trend Change Level.
Expiry Range for Nifty
Upper End of Expiry : 23238
Lower End of Expiry : 22876
Nifty Intraday Trading Levels
Buy Above 23075 Tgt 23108, 23144 and 23196 ( Nifty Spot Levels)
Sell Below 23020 Tgt 22975, 22920 and 22860 (Nifty Spot Levels)
Wishing you good health and trading success as always.As always, prioritize your health and trade with caution.
As always, it’s essential to closely monitor market movements and make informed decisions based on a well-thought-out trading plan and risk management strategy. Market conditions can change rapidly, and it’s crucial to be adaptable and cautious in your approach.
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