Pre-Market Analysis for 18th Nov’2024
I. Overall Market Sentiment
*Data collected from NSE website.
Key Indicators driving the Market Sentiment:
1. Open Interest (OI) Changes
Overall open interest fell by 16.74%, indicating reduced market participation, likely due to cautious or uncertain sentiment.
2. Volatility Indicator (India VIX)
Decreased by 4.27%, suggesting a reduction in market volatility, which could imply a more stable or consolidating market environment.
3. Segment-wise OI Changes
Index futures increased by 1.5%, while both call options and put options saw significant declines (call options down by 31.2%, put options down by 19.1%), indicating reduced options trading activity and a preference for futures.
4. Overall Put-Call Ratio (PCR)
Increased from 0.73 to 0.86, suggesting a slight shift towards a more balanced to bullish sentiment, with higher interest in put options relative to calls.
*For detailed analysis, please subscribe@ https://www.youtube.com/@KRVFinMart
II. Institutional Activity Analysis
1. Foreign Institutional Investors (FIIs)
Key Points & Observations:
1. Index Futures: FIIs increased both long positions (up 8.3% to 11.0%) and short positions (up 5.3% to 37.1%). The significant rise in short positions suggests a bearish outlook despite an increase in longs.
2. Index Call Options: Both long and short call positions saw substantial declines, with long positions down by 22.5% (total 17.4%) and short positions down by 26.8% (total 13.7%). This indicates reduced participation in call options, reflecting lower confidence in an immediate bullish move.
3. Index Put Options: Similar to call options, both long and short put positions fell sharply. Long positions dropped by 22.9% (total 23.6%), and short positions declined by 29.8% (total 14.1%), suggesting reduced hedging activity.
4. Put-Call Ratio (PCR): The long PCR slightly decreased from 1.18 to 1.17, while the short PCR decreased from 0.93 to 0.89, indicating a slight tilt towards bearish sentiment with a focus on short positions.
2. Proprietary Traders (Pro)
Key Points & Observations:
1. Index Futures: Significant reduction in both long (down 16.8% to 7.3%) and short positions (down 3.6% to 12.4%), indicating reduced engagement in futures trading, possibly due to uncertainty or consolidation.
2. Index Call Options: Both long and short call positions saw a major decline, with long positions down by 24.9% (total 22.9%) and short positions down by 29.7% (total 25.3%). This reflects a cautious approach, reducing exposure in calls.
3. Index Put Options: Decline in both long (down 14.9% to 25.5%) and short positions (down 19.9% to 23.7%), indicating reduced activity in put options as well.
4. Put-Call Ratio (PCR): The long PCR increased from 0.85 to 0.96, and the short PCR rose from 0.71 to 0.81, indicating a shift towards a more balanced outlook, with an inclination towards bullish sentiment in puts.
3. Clients (Retail & HNI Traders)
Key Points & Observations:
1. Index Futures: Retail & HNI traders slightly increased both long (up 3.2% to 64.8%) and short positions (up 0.2% to 30.4%), showing a strong preference for long positions, indicating bullish sentiment.
2. Index Call Options: Long call positions fell significantly by 35.4% (total 59.7%), and short positions declined by 32.7% (total 61.0%), reflecting a significant reduction in call option participation, likely indicating caution.
3. Index Put Options: Long positions fell by 19.9% (total 48.5%), and short positions declined by 15.8% (total 62.2%), suggesting a decrease in hedging activities but a continued preference for short positions.
4. Put-Call Ratio (PCR): The long PCR increased from 0.56 to 0.70, and the short PCR rose from 0.70 to 0.88, indicating a cautious stance with a shift towards a neutral to bearish outlook.
4. Domestic Institutional Investors (DIIs)
Key Points & Observations:
1. Index Futures: DIIs marginally increased their long positions by 0.7% (total 16.9%), while short positions remained unchanged at 20.0%, indicating a conservative stance.
2. Options Activity: Limited activity in options, with no changes in call options and a slight increase in long put positions by 0.9% (total 2.4%), reflecting a defensive positioning.
III. Conclusion: Market Outlook for the Day
The data reflects a mixed to cautious market outlook. FIIs have increased their short positions in futures, signaling a bearish stance, while Proprietary Traders reduced their exposure significantly, and indicating uncertainty. Retail traders show a strong preference for long positions, hinting at optimism, but the large decline in options activity across participants’ points towards reduced confidence in a directional move.
With declining volatility (lower India VIX) and reduced open interest, the market may experience consolidation or limited movement. However, the slight increase in the overall PCR suggests potential for a mild recovery, but the bearish inclination from FIIs could keep the sentiment cautious. Expect a range-bound session with a slight negative bias unless new triggers emerge.
*For the concepts, please enroll @ https://krvfinmart.com/courses
*For More Information, Please visit the following
Website: https://krvfinmart.com
YouTube: https://www.youtube.com/@KRVFinMart
Facebook: https://www.facebook.com/KRVFinMart
Instagram: https://www.instagram.com/KrvFinMart
X : https://x.com/krvfinmart
*Disclaimer: The content provided on KRVFinMart is intended for educational and informational purposes only. We are not licensed financial advisors, investment professionals, or legal experts. By accessing and using our content, you acknowledge that you have read and understood this disclaimer. You agree that KRVFinMart is not liable for any direct or indirect consequences, losses, or damages resulting from your reliance on the information provided on this website/Channel. (*For any other info, contact us @ https://krvfinmart.com/contact-us).
Responses