By Ruchit Jain
Nifty started the June series with some short positions rolled over from the May series; however, the quantum of shorts was low as compared to those seen at the start of the May series. During this week, Nifty witnessed long formation on Monday and then we saw some consolidation ahead of the weekly expiry. The index took support around 16500-16450 as put writing was witnessed at 16500 strike and then it ended the weekly expiry on a positive note above 16600. The Bank Nifty index also had recently added some longs and the index has consolidated in a range during this week.
Recently, we have seen that the markets have reacted negatively when FII’s have formed short positions in the index futures. After some relief, they have formed short positions again which could be negative for the markets in the near term. The resistance for the Nifty in the coming week will be seen in the range of 16700-16800 followed by 17000. Traders are advised to look to lighten up from long positions in this up move around the mentioned resistance zone. The immediate support for Nifty is placed around 16400 and if the index breaks this support, then we could see the market drifting lower towards 16200-16000 zone again.
(Ruchit Jain is a Lead Research at 5paisa.com. Views expressed are the author’s own. Please consult your financial advisor before investing.)