Index Options Stock Cash Trading Tips- Ripples Advisory

Markets Witness Selling Amid Global Trade War Tensions And Indian General Elections

This week Nifty Index after making a high of 11657 fell nearly 400 points to close at 11279 after making a low of 11251. The market remained volatile as global markets witnessed selling after the U.S. hiked duties on $200 billion worth of Chinese products, in a new escalation of tensions. The Nifty Index close below its important 6-week support level of 11312, arising concern for further weakness in the market, and opening doors for 11060 levels.

Sector Analysis

Amidst a falling market last week, all the sectors ended in red likewise. All the Major sectors ended negatively with Automobile & Auto parts (-4.31%) being the biggest loser. The Minor sectors which managed to stay positive last week were Airlines (10.37%) and Gold & Jewellery(1.17%).

The top stocks which ended positively are 63Moons Technologies Ltd (15.44%) from IT sector, Welspun Corp. (11.14%) from Metal & Mining, Avadh Sugar & Energy (9.48%) from Sugar , Birla Corporation (9.31%) from Cement & Cement products, Blue Star (7.57%) from Home Appliances, HSIL(6.92%) from Interior Construction, And Onmobile Global (6.35%) from Telecom sector.

In this high volatility period, one should keep an eye on the defensive sectors like Pharma, IT and FMCG which tend to move opposite to the direction of markets and can serve as a hedge against losses in one’s portfolio.

Open Interest Analysis

FII & PRO are the major players in the Derivatives segment and have an upper hand in the market and their position provides direction to the market. In the May month expiry, they have started with the position of (-79551) contracts in Index option (both FII & PRO combined) when Nifty spot was trading at 11642. Till yesterday they had Net Open Interest position of (-129304) contracts for the May expiry. Thus, if we calculate from expiry till yesterday they have created short position, they have sold 49753 contracts in the May month Expiry. However, on 10th May (yesterday) they have sold 29650 contracts. For further detail check the Open Interest table below.

Index Options

FII+PRO in combined have created short position of 49753 contracts in the May month expiry.

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