Nifty future has ended today’s session much lower, closed down by more than 2%, even Sensex lost about 300 points. This fall was led by IT stocks mainly TCS and INFY, from automobiles space Tata motors was the worst performer. Today Reliance ind has lost its crown as most influential stock in Sensex to ITC, due to poor performance in last few trading sessions.
Nifty futures for near term:
Focus on Nifty futures, today nifty future has added about 2.7 million shares in open interest, most of the addition being on short side. Nifty future lost about 130 points today and there was 14.5% jump in open interest, we see short position were added and tells us that traders are expecting nifty to move lower in near term. But one thing is not fitting on to my brain is nifty options open interest OI data, there I see nifty 5000 put has highest open interest, which must be a support for this downside. Nifty future traded below 5000 mark for some time and also closed below it. My confusion was nifty future suggests markets to move lower, but options tell it will bounce from here. 😕
What options open interest data says:
I also saw some writing in nifty 5300 and 5400 call strikes, but writing on put options was not very much concentrated most option writing was at nifty 4900 put. While 5100 put saw unwinding, as open interest hints. Tomorrows opening will give very clear signal where market will be moving in near term. I would suggest traders that strategy will be short sell nifty future in every bounce, at the closing of session I saw nifty traded lower compared to Friday’s session. If tomorrow nifty future don’t bounce back then I will enter short, if it bounces I will wait for higher levels where I can short it again.