Month: February 2014

The Nifty Futures had a range of a 150 points during the week with high volatility.

We saw buying emerge from the lows and bouts of selling at the highs.

The NFP number on friday in the US will certainly give the market a gap open.

From a profile perspective this open will be an OAOR weekly and hence can be a big mover.

Feb_NF_Compo

On the charts we see 6090- 6134 as a mover profile holding the key to the outlook for the week.

On that day we had seen both longs and shorts initiating positions in the futures.

Hence it’s a profile which contains some stuck longs and some new initiated shorts from that day.

All the more reason for the market to move decisively from that level during the week.

It it manages to stay and close above 6134 we get shorts forced to cover and the market starts looking at 6222/ 6267 seriously through the week as a target.

The vwap of the sell off from 6353 spot levels is at 6085- 6090 spot . Hence shorts will not be comfortable with an auction over this point.

If we do open above and come back into Friday’s range as also the weekly range of the Nifty , look for the 80% weekly to complete as the profile showed both buyers and sellers during the week.

Weekly values are 6061- 5995- 5981, which means we visit last week’s lows if we come back into the weekly range again.

It’s simple – In market profile it’s the same principles and rules of the intra day trade but we are applying it to the weekly time frame to help us carry over profitable trades.

BNF_FEB_compo

The BankNifty profile shows a large value area developing between 10300- 10100 and a rejection of prices below 10100 seen in the single prints.

The seller from the profile of the 30th is still active at 10380. Up ahead we see sellers at 10700 also in those single prints there.

If we do get above 10380 the gap to 10446 is the immediate target and can be followed up by a visit to 10520/ 10540.

An upward break of the profile over the 10380 level should be good to reach the bottom of the single prints near 10650 eventually during the week.

However failure to hold a gap open can invite a slide through the value area and the 10300- 10100 value area trade will work swiftly.

There is opportunity and good trade setups into next week.

Nifty/ BankNifty Feb Futures Profile and outlook

Cash Market : FII’s again sold 267 Cr in the cash market on friday .DII’s continue to be net buyers bidding the market up especially from the lows. Whilst they have been buyers especially on month ends previously in equity, I don’t recollect such strong cash buying figures from them in the apst 6 months for 4 days in a row.

Index Futures : The highlight of Friday’s trade in futures by FII’s was the closure of 13458 contracts which were shorted . Now they are net short by 27498 contracts added from 31st Jan. The Long liquidation however continued in the longs some of them hold.Data shows 30916 contarcts reduced in Feb series to add to the 86683 contracts they reduced in Jan series. 12102 contracts were again reduced in Friday’s trade . Overall their long exposure in Index Futures overall is 220162 contracts down from a high of 471458 contracts seen on 18th Dec.

Index Options : 61652 contracts in long calls were bought on Friday before the close. 29233 calls were shorted. They reduced 6962 long puts into the close and added 2071 short put contracts. Their option behavior was clearly bullish. It’s typical of institutional money to start or change a new trend with options, hence we watch this space closely for a change of behavior however short term it may be.

Stock Futures : Whislst folks focus on cash buy/ sell figures we also track this space to see if the selling has a more longer to intermediate term implication. FII’s added 8553 long stock futures and closed 9994 stock futures shorts on friday. Through the recent sell off in Feb series from 31st they have been buying stock specific futures . They remain net long in stock futures by 23238 contracts.

The charts for open Interest are updated by RM everyday in the evening.You will find it on the Home page under “Data that we watch”.

Our records show that out of the total Open Interest outstanding in the market the precentage held by FII’s is upwards of 80% in index futures. Hence when we say we watch this data we do mean it literally.

FII activity – 07 Feb 2014