If you do not read Kris’ comments which he so painstakingly puts out for us every night, you are missing out on an amzing insight into market behavior.
Many people know that FII’s control the ebb and flow of the markets, but what many people do not read is the trades executed by these institutions in futures and options which have a large bearing on the immediate trend.These FnO investments are decrypted for us by Kris.
Here is a gem from his notes today :
“A low turnover day. As expected a rally materialized. However, the whole rally has been a gap up opening. So, the only people who got benefited must be the long holders of earlier day. Nifty Future OI has increased by 6L contracts out of which FII participation is only 6K contracts. Price rise with OI increase means longs are building into the system. Long building without FII participation is fraught with danger. There are a couple of things that we have to be cautious in the entire month of August. On 25th and 26th of July approximately 50% of Nifty Future rollover happened around a price range of 5630-5680 and I am assuming them to be shorts. Further, they have sold around 10% – 50K contracts in the first 2 trading days of this series. All in all, this month looks to me as one where upside is capped – or… we are in for a panic bottom in the next week or so… where shorts get closed in a profit. Be careful with longs till 5600 is crossed – we may be in for some bear attack this month”
You can catch the entire piece here :
Thank you Kris.