Analysis of the F&O (Futures & Options) open interest, cash data, and global indices for suggesting market sentiments for 8th January 2025, shall be as under;
1. F&O Open Interest Data: This includes changes in open interest for major indices (like Nifty, Bank Nifty, etc.), sectors, and key stocks. Look for build-ups:
Long Build-up: Increase in OI + Price ↑ = Positive sentiment
Short Build-up: Increase in OI + Price ↓ = Negative sentiment
Long Unwinding: Decrease in OI + Price ↓ = Weakness expected
Short Covering: Decrease in OI + Price ↑ = Recovery expected
2. Cash Segment Data: Net inflow/outflow by FIIs and DIIs.
FII buying: Positive sentiment
FII selling: Negative sentiment
3. Global Indices Position: Trends in indices like Dow Jones, S&P 500, Nasdaq, Nikkei, FTSE, etc., and global macroeconomic factors (like crude oil prices, US yields, and dollar index).
4. Key Events: Upcoming macro events like Fed meetings, inflation data, or geopolitical developments.
Suggestions for 8th Jan 2025 Sentiment:
Bullish sentiment: If OI indicates long build-up, FIIs are net buyers, and global indices show recovery.
Bearish sentiment: If OI indicates short build-up, FIIs are net sellers, or global indices are weak.
Neutral/Range-bound: If mixed signals are observed across parameters.
1. F&O Open Interest Analysis:
Nifty 50 Index:
The Nifty 50 closed at 23,707.90, up 0.39% from the previous close.
Call Options:
Highest open interest (OI) observed at the 24,000 and 23,800 strike prices, indicating significant resistance levels.
Put Options:
Highest OI at the 23,500 strike price, followed by 23,700, suggesting strong support levels.
Stock-Specific Futures:
Some stocks as discussed below in the NSE F&O segment experienced a notable surge in futures open interest, with increases exceeding 15% compared to the previous trading session.
Based on the latest data, the following stocks in the NSE F&O segment have experienced a significant increase in futures open interest (OI), indicating heightened market activity:
1. Dr. Lal Pathlabs
Open Interest (OI): 1,155,600 contracts
Change in OI: 427,800 contracts
Percentage Change in OI: +58.78%
2. Union Bank of India
Open Interest (OI): 43,148,175 contracts
Change in OI: 14,739,675 contracts
Percentage Change in OI: +51.88%
3. Metropolis Healthcare
Open Interest (OI): 1,778,800 contracts
Change in OI: 294,400 contracts
Percentage Change in OI: +19.83%
4. IRB Infrastructure Developers
Open Interest (OI): 84,624,000 contracts
Change in OI: 11,582,500 contracts
Percentage Change in OI: +15.86%
A significant increase in open interest, especially when accompanied by corresponding price movements, can provide insights into market sentiment:
Price Increase with OI Increase: Suggests a long build-up, indicating bullish sentiment.
Price Decrease with OI Increase: Indicates a short build-up, reflecting bearish sentiment.
For instance, Union Bank of India witnessed over a 54% jump in open interest while the stock tumbled nearly 8%, indicating a short build-up.
It's essential to analyze these metrics in conjunction with other market indicators and company-specific news to make informed trading decisions.
2. Cash Segment Data:
Foreign Institutional Investors (FIIs):
The Nifty January futures rose by 0.27% to 23,785.45, with open interest up by 1.70%, indicating FII participation.
3. Global Indices Performance:
U.S. Markets:
The S&P 500 Index (SPY) declined by approximately 0.70%, closing at 591.21 USD.
The Dow Jones Industrial Average (DIA) saw a marginal decrease of 0.10%, ending at 426.69 USD.
The Nasdaq 100 (QQQ) dropped by 1.35%, closing at 517.48 USD.
European Markets:
Inflation in the eurozone increased to 2.4% in December from 2.2% in November, potentially impacting investor sentiment.
Asian Markets:
Asian equities continued their rally, buoyed by expectations of a less aggressive U.S. trade policy.
4. Economic Indicators:
U.S. Services Sector:
The ISM Services Index rose to 54.1 in December, indicating robust growth and potentially influencing Federal Reserve policy decisions.
Conclusion:
Positive Indicators:
Strong support levels in Nifty's put options at 23,500 and 23,700.
FIIs showing interest in Nifty futures.
Continued rally in Asian markets.
Cautionary Signs:
Resistance at 23,800 and 24,000 levels in Nifty's call options.
Declines in major U.S. indices.
Rising eurozone inflation, which could affect global investor sentiment.
Market Sentiment for January 8, 2025:
Considering the mixed signals, the market sentiment appears cautiously optimistic. While there are positive domestic indicators, global factors warrant vigilance. Investors should monitor key resistance and support levels and stay alert to global economic developments that could influence market dynamics.
Anish Jagdish Parashar
Securities Analyst
Source Data:nse &authentic sites.
Disclaimer: Content is for educational purposes only. For investment decisions consult your financial advisor.
.jpeg)