F&O Outlook: Nifty may fall towards 16500 in near term; support in 16300-16200 range, resistance at 17000 | The Financial Express

F&O Outlook: Nifty may fall towards 16500 in near term; support in 16300-16200 range, resistance at 17000

Along with the global markets, our markets too have been in a downtrend for the last one week and the derivatives data too indicates a probability of a continuation of the downtrend in the near term.

F&O Outlook: Nifty may fall towards 16500 in near term; support in 16300-16200 range, resistance at 17000
In case of any pullback moves, 17000 will be seen as the immediate resistance, and only on a move above that, a meaningful pullback should then be expected

By Ruchit Jain

The September series was divided into two halves; the markets continued its upmove in the first half of the series and reclaimed the 18000 mark, but it took a complete u-turn in the later half and corrected sharply to end the series tad above 16800 with a loss of 4 per cent over the last month’s expiry. In the later part of the month, we witnessed a combination of long unwinding as well as a fresh short formation which led to this sharp cut. It was mainly because of the sharp depreciation in our currency which had shown resilience to the rising Dollar Index, but it now ultimately gave a breakout and almost tested the 82 mark.

Also Read: Gold Price Today, 30 Sep 2022: MCX gold tops Rs 50250 on global cues; check support, resistance

FII’s had started the September series with rollover of short positions from August series. The markets crept higher towards 18000 mark but they kept the short positions intact. But after the FED’s outcome of the decision to hike rate, they increased their short positions and even turned sellers in the cash segment. We have seen in the recent past as well that the combination of selling in cash markets by the FIIs and the formation of short positions in the futures segment has been catastrophic for our markets. The same scenario was repeated this time and we saw the impact of the same in the later part of the series.

Now, the rollover in Nifty is at 78 per cent, which is in line with its average, while that in Bank Nifty is at 82 per cent. If we look at the data, FII’s who were short throughout the September series have rolled over short positions to the October series and their ‘Long Short Ratio’ now stands at 13 per cent only. They have over 1.43 lakh contracts open on the short side which is quite significant. On the flipside, the Client section has 68 per cent positions on the long side. In options segment, 17000 call option for the coming series has highest open interest indicating immediate resistance for the coming week.

Also Read: F&O expiry 6 Oct: Nifty support at 16500, avoid aggressive bets, focus on stock-specific action; RBI MPC eyed

Along with the global markets, our markets too have been in a downtrend for the last one week and the derivatives data too indicates a probability of a continuation of the downtrend in the near term. In case of any pullback moves, 17000 will be seen as the immediate resistance, and only on a move above that, a meaningful pullback should then be expected. Till then, we may see downmove towards 16500 in the short term which will be seen as the immediate support followed by 16300-16200 range.

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

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