FIIs index futures 'Long Short Ratio' plunged to 56%: Angel Broking

Views of Ms. Sneha Seth (Derivative Analyst, Angel Broking):

"Post decent correction, benchmark index finally recouped some of its losses as index opened with an upside gap followed by strong buying during the day.

As far as today's options activities are concerned, we witnessed call writers of 10200-10300 and 10400 strikes covering their positions due to strong recovery seen from the support zone today. However, some fresh OI addition was visible in 10400. On the flip side, 10000 put option added good amount of fresh positions; followed by some build-up in 9700 and 10100 strikes.

Today's recovery must have been a sigh of relief from most of the bull's; but, surprisingly open interest activity in the index doesn't reflect any major change despite a strong upmove. Since the beginning of December series, Nifty as well as BankNifty open interest surged 18.50% and 46.25% respectively; looking at the price action we believe majority of the positions formed are on short side and are still intact.

Stronger hands (FIIs) have also added good amount of shorts in index futures segment; as a result, their 'Long Short Ratio' has plunged from 68% to 56%. In addition, they also bought index put options along with writing in index call options. Considering the above data points, we believe market may attract fresh selling going ahead and 10200-10250 (average price range for the shorts formed) may now act as a strong hurdle; while, immediate support is around 10000 mark."

Source : Equity Bulls

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