F&O Expiry Analysis: FIIs reducing long positions in index futures, Nifty support in 17300-17250 range

The immediate support for Nifty is placed in the range of  17300-17250 while 17800 followed by 18000 will be seen as hurdles.

Since the markets have an extended weekend, the open interest concentration in the coming weekly series is scattered. (Image: PIXABAY)

By Ruchit Jain 

April futures & options series had started on a positive note as the indices had seen good long rollovers from the March series. Nifty reclaimed the 18000 mark at the start of the series, but there was no follow up buying seen. The index then corrected gradually from the highs due to long unwinding and gave up the gains to end around 17500. Even in stocks specific move, the unwinding of long positions was seen in certain heavyweights.

Nifty has given up the gains seen at the start of the series and that has been mainly due to the unwinding of long formations. FIIs have reduced their long positions in the index futures and have added fresh short positions too. Their ‘Long Short Ratio’ in index futures at the mid of the series stands at 45% versus 73% at the start of the April series. This means that they have more short positions in this segment now which is not a good sign. In stock futures too, FIIs have reduced their bullish positions in last few days. Now, the retail clients have also lightened up their positions as the overall net open interest in index futures has declined considerably in the last few days. However, their ‘Long Short’ ratio stands around 59% at the mid of the series. FIIs have again turned net sellers in the cash segment and hence, the overall data from them does not pose a positive picture.

Since the markets have an extended weekend, the open interest concentration in the coming weekly series is scattered. The highest open interest in the coming weekly series is at 18500 call and 17000 put options. Monday’s market open could depend on the movement of global markets in the next couple of days and the follow-up move at the start of the week could then set the trend for the coming week. Looking at the data by the stronger hands, we would advise traders to be cautious and avoid aggressive positions until follow up buying is seen. The immediate support for Nifty is placed in the range of  17300-17250 while 17800 followed by 18000 will be seen as hurdles.

(Ruchit Jain is the Lead – Research at 5paisa.com. The views expressed by the author are his own. Please consult your financial advisor before investing.)

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