Nifty tanks below 11850 post RBI rate cut, but no major shorts: Angel Broking

Ms. Sneha Seth (Derivatives Analyst, Angel Broking):

"Post mid-week holiday, we started off the day on a slightly positive note despite unfavourable global cues. As the day began, we saw index correcting below 12000 and then halted ahead RBI policy outcome. The selling pressure accelerated as Monetary Policy Commit cuts the repo rate by 25 bps to 5.75 percent. Eventually, the benchmark index concluded the session near the lowest point tad below 11850.

Despite gigantic sell-off in the broader market, we could hardly see any meaningful shorting especially in BankNifty. However, some build-up was seen in Nifty Futures. It is the second consecutive session, wherein we saw writing in ATM and slightly OTM call options (ie: 11900-12300 strikes). On the flip side, fresh build-up was seen in 11400-11900 puts of the coming weekly series. Surprisingly, regardless of today's fall the fear index was merely down 0.64%. Considering the above data points, we would advise traders to wait for the follow-up moves before initiating any aggressive bets in the market. Going ahead, 11750-11770 shall act as immediate support zone; whereas, 12000-12040 is a hurdle now."

Source : Equity Bulls

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