Summary Report: Open Interest, Option Chain and FII/DII Activity in Nifty 50 for the Week Ending June 12th, 2020

2 min read

By Ashutosh Dave

Price-Volume Analysis

The rally from May took a halt this week and the markets turned lower on global cues as fear surfaced about the second wave of COVID pandemic. The Nifty 50 tested the 9900 levels as FIIs remained net sellers this week reversing the trend from previous weeks. The volumes surged towards the end of the week as the price weekend indicating a bearish outlook in the near future.

Open Interest Analysis

The combined open interest in all the three futures increased as the price weakened indicating a build-up of short positions in the Nifty futures.

Option Chain Analysis

When looking at the option chain of the weekly options expiring on the 18th of June, strong short term support levels have developed around 9750, 9500 and 9000 respectively as seen in the high open interest on the put side. While short term resistance points can be observed around 10000 and10500.

FII/DII Analysis

FIIs showed net consistent selling this week, supporting the downward move. This is a bearish signal as we head into the next week. The DIIs showed some buying as they got the opportunity to take advantage of lower entry prices, especially on the last day of the week.

For the research methodology and more information on Nifty 50 futures refer to this earlier blog on QuantInsti portal.

Disclaimer: All investments and trading in the stock market involve risk. Any decisions to place trades in the financial markets, including trading in stock or options or other financial instruments is a personal decision that should only be made after thorough research, including a personal risk and financial assessment and the engagement of professional assistance to the extent you believe necessary. The trading strategies or related information mentioned in this article is for informational purposes only.

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