FIIs sold Nifty worth Rs. 1060.21 cr and Bank Nifty Rs. 401.54 cr.
- FIIs net long is at 10.10%, reduced from 12.88%, i.e., down 2.78% in a single day.
- VIX is at 9.95 (-0.70%).
- PCR is at 0.74.
- FIIs sold Rs. 1527 cr in cash, Rs. 1450 cr in index futures, and Rs. 1073.10 cr in stock futures.
DIIs bought Rs. 2889.30 cr in the cash segment.
- Open interest position
A. FIIs covered 4543 lots on the long side and created shorts in 3841 lots.
B. DIIs created long positions of 366 lots.
C. Retail clients created long positions in 1506 lots and covered shorts in 2132 lots.
D. Pros covered long positions in 1482 lots and covered shorts in 5862 lots.
Note: FIIs’ net long position reduced drastically by 2.78% in a single day, but to my surprise, VIX also came down by 0.70% and PCR is in the oversold zone at 0.74.
The reason for VIX coming down lies in the very high position of FIIs’ shorts. I may sound erratic, but my logic is that FIIs normally cover shorts from 8.5–7.5% shorts, so they do not have much room to go short. Any further dips will bring down FIIs’ long positions to around 9–8.5% from 10.10%.
As far as levels are concerned, 26005–25893 will be a strong support zone and a level to buy in two tranches if it comes to the mentioned levels. If Nifty falls by 150–250 points, FIIs’ net long will come down to a very highly oversold zone, shorts will get covered, and new buying will emerge from DIIs, retail, and pros.
One thing I am observing is that volume is drying up, especially in Nifty trades. DIIs are not participating at all, and any sector that gives a base reversal or breakout performs for 2–3 days and then fizzles out. It is a very hard market to trade.
The last 2–3 days have not been good for our trades. 2–3 trades are not performing, and we are not getting any trade with conviction.
As I am analysing the situation and Trump’s behaviour, any trade deal will not come in the next 3–4 months at least. It may take two more quarters to settle with the Americans, so the market will be in a broad range from 25700 to 26300. FIIs will not allow markets to go up, and DIIs will not allow the market to slide. This tug of war will continue for some more months.
We will be changing our technique and will go for pure trading bets of 3–4–5% for a few days. On the options front, IV is at 7.2–7.5 in in-the-money options, which will not perform despite the right trade. We will go for Nifty futures trades instead of options.
As far as intraday levels are concerned, if Nifty breaks below 26094, Nifty will slip up to 26061–26021, SL 26141.
On the upper side, if Nifty is able to break above 26181, Nifty will move up to 26220–26260, SL 26140.
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