Market

Nifty shorts still intact, continue to sell on rise till index breaches 17900-18000 range

The November sequence ended with barely lower than a few per cent, which clearly ended its current profitable streak.
(Image: REUTERS)

By Sameet Chavan

Market had a constructive begin yesterday regardless of blended world cues. In the preliminary trades, it regarded a bit tentative as there was some hangover left of earlier day’s late correction. Fortunately, all these nerves settled down within the first half an hour after which it was all huge boy RELIANCE’s present thereafter. The stock saved surging all through the day to mark whopping positive factors over 6% p.c. It is unnecessary to point out when this heavyweight strikes on this vogue, it actually takes the benchmark alongside it. If we take a look at the contributors listing, this stock single-handedly pushed Nifty past 17500 because it contributed 104 factors in Nifty.

The November sequence ended with barely lower than a few per cent, which clearly ended its current profitable streak. Also the final couple of weeks have been tough for the markets general as they actually went beneath the hammer. After Monday’s brutal knock, the Nifty appears to have slipped right into a consolidation mode. The rapid range can be 17600 to 17200; the place 17200 turns into sacrosanct help and on the flipside, 17600–17700 is to be seen as a sturdy wall. We continue to stay on the bearish aspect and anticipate the present recovery to get bought into. Hence, merchants are suggested to begin lightening up longs if Nifty enters the talked about resistance zone. For the approaching day, 17400 – 17300 are to be seen as rapid helps. We reiterate that till the time we don’t surpass 17900 – 18000, one ought to continue with a sell on rise technique. Sooner or later it’s possible to breach the important thing help of 17200 to slide under the 17000 mark.

Rollover for Nifty and BankNifty stood at 82.56% and 83.76% respectively.
(Image: REUTERS)

Market seems to have reversed precisely from the important resistance levels, be it Nifty and Bank Nifty or even the midcap index for that matter. Traders are advised not to get carried away by in between recoveries and should avoid taking aggressive longs for a while.

In November series, we witnessed majority of short formation in both the indices and these positions have been rolled over too. Rollover for Nifty and BankNifty stood at 82.56% and 83.76% respectively. Surprisingly, stronger hands halted selling in index futures and opted to add some longs in recent correction and have rollover these longs in the next series. This has resulted, Long Short Ratio surging from 54% to 70% now. However, they remained net sellers in equities for the November month. Considering the rollover data, we believe most of the shorts are still intact and until we don’t see a sustainable move beyond 17800.

(Sameet Chavan is a Chief Analyst – Technical & Derivatives at Angel One. Views expressed are the author’s own. Please consult your financial advisor before investing)

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