Traders are advised to keep a ‘Buy-on-Dip’ approach

Weekly F&O Data Analysis

Derivatives - FnO
by 5paisa Research Team Last Updated: 2022-11-22T10:44:04+05:30


Nifty50 14.11.22.jpeg

The Nifty has been slowly going up as the global cues for the stock market remain positive. Following the release of recent inflation data, US markets have continued to rise, while bond yields have cooled from recent highs. The Dollar Index has also corrected sharply in the last few sessions, which is positive for equity markets. 


The Nifty index is holding above its crucial support, and the momentum readings on the daily as well as hourly time frame charts remain in 'Buy' mode. Hence, the short-term trend continues to be positive for the Nifty index. If we look at the derivatives data, we have seen long formations in Nifty where FII’s have added long positions in the Nifty futures. Their ‘Long Short Ratio’ is placed around 60 percent which is a positive sign, while they have been buying in the cash segment too. The client section too has been riding this trend, with their ‘Long Short Ratio’ currently placed around 57 percent. If we look at the options data, the 18000 put option has the highest open interest which would be seen as the make-or-break level while 18200-18250 would also be seen as immediate support. On the flip side, the immediate resistance as per the open interest data is seen around 18500 followed by 18700 levels.


Since the daily chart structure as well as derivative data remains positive for key indices, traders are advised to keep a ‘Buy-on-Dip’ approach and look for buying opportunities on declines. The IT sector has witnessed buying interest off late post the recent up move in the Nasdaq Index. The Metals space has also been buzzing as the falling Dollar Index is generally positive for this sector. Hence, traders are advised to look for stock-specific opportunities within these sectors as the outperformance could continue in the near term.

 

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Disclaimer

Investment/Trading is subject to market risk, past performance doesn’t guarantee future performance. The risk of trading/investment loss in securities markets can be substantial. Also, the above report is compiled from data available on public platforms.

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