The general price trend has been sideways and range-bound between 9200-9300 levels, with the 9200 level acting as a short term support. The volumes this week have been lower compared to the last week(especially towards the end of the week). This indicates the indecisiveness and a lack of momentum in either direction.
Open Interest Analysis
The combined open interest in all the three futures also remained subdued compared to previous weeks, with some short covering happening in the middle of the week(on the 6th of May), as can be seen in the chart below:
Option Chain Analysis
After the expiry of weekly option on the 7th of May, significant open interest was built-up in the 9500 and 9400 call options for the Nifty option expiring on the 14th of May.
Thus, 9500 and 9400 present strong short term resistance to an upward move in Nifty.
Similarly, significant open interest was built-up in the 9000 and 9200 put options respectively, which present the two support levels going into the new week.
The overall interest of DII remained on the long side but at low levels. However, the FIIs showed considerable buying interest especially, towards the end of the week(on 7th May). This is a positive indication for the markets as we head into the new week.
For the research methodology and more information on Nifty 50 futures refer to this earlier blog on QuantInsti portal.
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