F&O Manual: As Nifty flatlines, traders reiterate to sell on rise

Sector wise, cement and textile saw long buildup, a phenomenon when open interest (OI) and prices go up in tandem. (Representative Image)

The market continued to sing the same tone on January 12 that traders have been seeing for the last two weeks. Nifty was nearly flat at 17,891 while Nifty futures were at 17,960.75. The index was at the support line and a bit of pullback was seen though soon bears pushed the index down.

Some volatility in the market is expected today due to weekly expiry. On the options front, for the January 19 expiry, 17,900 and 18,000 saw call writing while put writing was concentrated at 17,900.

Bars reflect changes in OI during the day. Red bars show call option OI and green put option OI.

Traders continued to find it difficult to trade in such a scenario.

“Nothing new is likely to happen in the market,” said Santosh Pasi, a trader and a Sebi-registered investment advisor. “Nifty is at support and hence it may see some pullback but it is still a sell-on-rise market.”

Manish Shah, another trader and a technical analyst, also concurred. He sounded disappointed that the market was giving very few opportunities to make money.

Sector wise, cement and textile saw long buildup, a phenomenon when open interest (OI) and prices go up in tandem. Meanwhile, telecom continues to be bears’ favourite as they saw another day of short buildup – price falling but OI rising. Oil and gas was another sector that was under bear pressure.

Navin Fluorine was at centre of attention as the counter saw 15 percent jump in OI along with prices. Cummins India followed with a 15 percent jump in OI. Meanwhile, Coforge was under bear radar with OI rising but prices falling.

Shah also said there is an opportunity to short the IT stocks on an intraday basis. Meanwhile, a buying opportunity is there in Chola Finance on an intraday basis, he added.

Short covering was seen in cement and industrial names such as Grasim, UltraTech Cement, Dalmia Bharat and Titan. On the other hand, long unwinding was seen in MRF and SAIL.

Disclaimer: Trading in futures and options markets is extremely risky. Traders and experts mentioned above may not be SEBI registered. Hence, trades they have taken should not be construed as investment or trading advice. Please consult a financial adviser before taking any trades.