On a weekly scale, it has fashioned a bearish candle with a decrease shadow. At present, the index remains to be buying and selling under its 20, 50**, and** 100-day EMA stage. These averages are in falling mode, which is a bearish signal.
Nonetheless, the momentum indicators and oscillators are portraying totally different footage. On Thursday, each day RSI witnessed a fall under the 27 stage, which is the bottom stage for the reason that Covid fall. The each day stochastic has additionally given a bullish crossover within the oversold area. This means restricted draw back from present ranges.
Speaking in regards to the choice chain (Weekly in addition to Month-to-month) on the decision facet, the 19,100 strike has the utmost open curiosity, adopted by the 19,200 strike.
Whereas, on the Put facet, the 19,000 strike has the best open curiosity, adopted by the 18,800 strike.
Primarily based on the above knowledge, we really feel that the general vary for the November Sequence may very well be 18,650 to 19,350.
On the rollover entrance, for the primary time within the final 6 years**, the** Nifty has ended the October Sequence on a unfavorable observe. The market**-**extensive rollover remained unchanged at 92% (M-o-M).Nifty future has witnessed larger rollover at 83.39% in comparison with the earlier month’s 76% and can also be above the final 3 months**’** common 79.12%. The upper roll-overs together with a pointy decline of three.4% for the collection is indicating total bearish sentiments and positioning on the brief facet. Whereas, rollovers for Financial institution Nifty have been decrease at 79.31% versus 85.53% M-O-M and in addition decrease than the final 3 month’s common 80.65%.
The Banking index has strongly underperformed the Nifty for the second consecutive month, shedding over 4.5% for the collection.
Primarily based on the rollover knowledge, we really feel potential outperforming sectors may very well be auto, media**, and** realty whereas potential underperforming sectors may very well be banking and oil & gasoline.
High picks primarily based on the rollover knowledge are Coal India and Bajaj Auto among the many giant caps whereas Trent, TVS Motors, Birla Comfortable**, and** L&TFH may outperform throughout the midcap house.
If we observe, the FII Index Future primarily based long-short ratio is at 10.87% which is the bottom stage since March 29, 2023. This implies solely 11% positions of FII in Index Futures is on the lengthy facet and 89% is on the brief facet. This knowledge is clearly indicating bearishness but it surely doesn’t imply we should always construct aggressive brief positions within the index at present ranges.
Allow us to see what had occurred up to now when FIIs have been massively brief to this extent:
— In March 2023, FIIs have been simply 9% lengthy and Nifty rallied 834 factors.
— In September 2022, FIIs have been simply 13% lengthy and Nifty rallied 900 factors.
— In June 2022, FII Longs have been at 15% and Nifty rallied 1150 factors.
These technical and spinoff components are indicating that it’s time to be a bit watchful on taking aggressive short-bets as a short-term consolidation and minor reduction rally may very well be on the playing cards and risk-reward in the direction of contemporary shorts can be unfavorable on the present juncture.
Speaking about key ranges, from a short-term perspective, the zone of 19,100-19,120 stage would be the quick hurdle for the index because the 23.6% Fibonacci retracement stage of its prior downward journey (19,850-18,837) is positioned in that area. Any sustainable transfer above the extent of 19,120 will result in an extension of the pullback rally upto 19,280-19,320 ranges. Whereas, on the draw back, any breach of the 200 EMA zone at 18,830 will result in the resumption of the southward journey for Nifty upto 18,600-18,650.
(Disclaimer: Suggestions, solutions, views and opinions given by the specialists are their very own. These don’t symbolize the views of Financial Instances)