Tanushree Jaiswal
Ruchit JainStock specific unwinding leadi...
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11/03/2024
Futures and Options
Long formation by FIIs led Sensex to 70000 and Nifty to 21000
5paisa Research Team
12th December 2023
Our markets continued their positive bias at the start of the week as the Nifty index registered a new record high of 21026. However, the index consolidated within a higher-level range and ended around 21000 with marginal gains.
The benchmark indices have achieved a new 21000 mark in the Nifty and 70000 mark in the Sensex. The momentum at new highs indicates a strong uptrend in the markets and although the RSI readings are overbought, there are no signs of reversal as of now. FIIs have formed long positions in the index futures segment where they started the December series with 36 percent long positions, but now have around 57 percent positions on the long side. They have been net buyers in the cash segment too which is a positive sign. Now although the momentum readings are overbought, there are no signs of reversal yet and thus traders should continue to trade in the direction of the trend till the supports are intact. In the options segment, 21000 call options and 20900 put options have the highest open interest for the weekly series. The immediate supports for Nifty are placed around 20900 and 20800 while resistance is seen around 21080 as per the retracement theory.
While the index could consolidate within this range, short-term traders can trade with a stock-specific approach as the market breadth is more in favor of advances. Only a break below 20800 could then apply some brakes to the ongoing rally and lead to some pullback move. Thus traders should keep a close watch on the given levels and manage positions accordingly.
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