Nifty Futures analysis for 16-04-2018

nifty160418
Nifty Future Daily Chart

“Nifty F&O positions signal markets could rally on short-covering” reports The Businessline, Chennai edition today on its front page.It states,

The net open interest (OI) for Nifty ‘put’ contracts crossed ₹40,000 crore on April 11. This has happened only four times in the past 20 years and each time, the Nifty index rallied between 6 percent and 13 percent in that particular month, data show.

It goes on to add,

“Such a huge build-up of short positions in the Nifty futures and options segment by both foreign portfolio investors (FPIs) and domestic traders implies there could be a massive short-covering rally before the April series derivative contracts expire,” said Rohit Srivastava, fund manager, Sharekhan-BNP Paribas. “The negative sentiment in April calls for a contrarian bet on the market.”

The Nifty Future closed higher for three consecutive weeks, from the low of 9960 to the high of 10527.05 to close at 10490.4.This rise still looks corrective in nature and has resistances at 10605 and 10635. It has the supports at 10472 and 10437. Any close below 10437 will imply that this corrective up move is complete and it is heading down.

The positional traders can maintain a long position above 10473 with a stop loss of 10435 on a closing basis, for the target of 10605 and 10635.They can sell it below 10426 with a stop loss of 10476 for the target of 10305 and 10213.

The day traders can buy it above 10527 with a stop loss of 10485 for the target of 10553 and 10605 and sell it below 10435 with a stop loss 10476 for the target of 10383.

Please do not trade for first 15 minutes from the open.

In case of  further queries, please contact me at my email address, vinayagrawal1411@gmail.com

Disclaimer:
Vinay Agrawal will not accept any liability for loss or damage as a result of reliance on the information contained within this tool including data, quotes, charts and buy/sell recommendation. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible. Future and options trading on margin involves high risk and is not suitable for all investors. Before deciding to trade in Equities, Commodities, Currency, Derivatives or any other financial instrument you should carefully consider your investment objectives, level of experience, and risk appetite.