Stock Market Trading Tips Today by Ripples Advisory Index Options

Huge Selling Position Of 123557 Contracts Has Been Created By FII & PRO (Combined) In Index Options

Huge selling position of 123557 contracts has been created by FII & PRO (combined) in Index options. FII & PRO in the last 2 days has created huge sell position of total 180335 contracts in Index options, which confirms weakness in markets. Nifty Index yesterday broke its crucial 5 weeks low level of 11549. Therefore, one should be cautious with their long positions in the market.

Sector Analysis:
As CNX Smallcap is witnessing a fall from last 4 weeks, one should keep an eye on the defensive sectors like IT, Pharma and FMCG to protect once portfolio from large downside risk in volatile markets. It has been observed that these sectors tend to perform well in falling markets and hence, these are classified as ‘defensive’. We will keep updating if there is any upmove in these sectors in the coming days. Stocks from the above sectors which have outperformed the falling market on 7th May were 63 Moons Technologies Limited (5.00%), Strides Shasun (7.24%), Vst Industries (1.46%).

One can select good stocks from these sectors from our app “Value Stocks” available on both Android and IOS.

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 (-240581) contracts for the May expiry. Thus, if we calculate from expiry till yesterday they have created significant short position, they have sold 161030 contracts in the May month Expiry. However, on 7th May (yesterday) they have sold 123557 contracts in a single day, which is huge and crucial for the market, therefore one needs to be very cautious with their long positions at these levels. For further detail check the Open Interest table below.

The US 10 Year T-Note is trading at 123.88. The Bond has crucial support at 117.42 made on 5th Nov 2018. The US Dollar Index is trading at 97.208.

Index Options

FII+PRO in combined have sold 161030 contracts in Index Options in the current May 19 Expiry.

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