Short covering by FIIs lead to an upmove in Nifty

Weekly F&O Data

by 5paisa Research Team Last Updated: Nov 06, 2023 - 05:16 pm 493 Views
Listen icon

Nifty50 06.11.23.jpeg

In the last one week, Nifty has witnessed a gradual pullback move where the index witnessed recovery from last week’s low of around 19000 led by positive momentum in the global markets. Nifty has surpassed the 19400 mark and the broader markets too have seen a slow and gradual recovery.

Recently, our markets have moved more in tandem with the global markets movement and the global news flows had more impact on the momentum. The US markets recovered after the Fed policy outcome and hence, our markets too witnessed a pullback move in the last one week. FII’s had significant short positions outstanding (about 85 percent positions on the short side last week) in the index futures segment. The positions were short-heavy and hence, they have started covering their short positions leading to this upmove in the Nifty. Nifty has surpassed its initial hurdle of 19370 which was the 38.2 percent retracement level of the recent correction. The daily and the hourly RSI readings positively indicate a positive short-term momentum. However, the Nifty has multiple hurdles in this up move where the 40 EMA resistance is around 19440 and then the 50 percent retracement level at 19530. In spite of some short covering, there are still significant short positions outstanding and if these shorts are covered further, then we could see further momentum. On the lower side, the immediate support is placed around 19270 and 19000. In the weekly options segment, 19300 put and 19500 call options have the highest open interest which could be the trading range in the next 2-3 sessions.

One should ride the existing positions with a trailing stop loss method and be very stock-specific in looking for trading opportunities.

Frequently Asked Questions

How do you rate this blog?


Start Investing in 5 mins*

Rs. 20 Flat Per Order | 0% Brokerage


About the Author

Our research team is composed of some highly qualified research professionals, their expertise range across sectors.

Open Free Demat Account
Resend OTP
Please Enter OTP
Mobile No. belongs to

By proceeding, you agree to the T&C.

Latest Blogs
Weekly Wrap-up: Tata Tech's Dazzling IPO Debut & the Tax Tale

In the heart of the bustling Indian stock market, a tale of triumph unfolded on November 30th, as Tata Technologies made an awe-inspiring debut. The curtains lifted at ₹1,200 apiece on the National Stock Exchange (NSE), casting a premium spell of 140% over the issue price of ₹500 per share. This stellar entry marked the grandest listing since November 2021, echoing through the financial corridors with waves of excitement.

Stock In Action: JSW Steel

Movement of the Day Analysis 1.    Strengths: Strong Momentum: Price above short, medium and long term from 5 days to 200 days respectively. 2.    Positive break-out. 

Swing Trading Stocks: Week of 11 December 2023

Swing Trading Stocks for the Week