The Nifty broke its 6-session losing streak and bounced back smartly on Wednesday. With this, it recovered nearly 42 percent of its losses seen in the last six sessions.

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The Nifty Bank had dragged the Nifty lower in the last six sessions with a cut of nearly 7.5 percent but, with yesterday's recovery, it pulled back nearly 45 percent of its losses with a roaring 1,000-point rally.

Technical levels at play; levels to watch

Technicals were at play on Wednesday with the Nifty taking support at days' low level of 11,090 which was near its 50-day moving average and then hitting more than a double hundred from the days' low to end near days' high. Enroute its big rally, the Nifty took out its 200-day moving average of 11,267 and now this level becomes its near-term support. The big question is: can the Nifty carry on from here? All eyes will be on the 100-day moving average of 11,406 which becomes the next resistance for the Nifty.

DIIs continue buying while FIIs' selling reaching exhaustion?

The foreign institutional investors (FIIs) continue to be sellers but a few positives were seen on Wednesday in terms of flows. The FIIs' net selling of Rs 485 crore was the lowest in October 2019 so far. The domestic institutional investors (DIIs) continue to back our market with an inflow of Rs 956 crore which means that net institutional inflow was Rs 471 crore, the highest in October 2019 so far.

FII data more bullish than bearish

The most bullish cue yesterday from the FIIs in the F&O market was the Put writing seen as they wrote 18,928 Put contracts which could indicate they are not expecting to see a big crack on the index. FIIs wrote nine Puts for one Call written. Additionally, FIIs bought three Calls for every two Puts. On the index, FIIs continue to remain net short with 68 percent position on the short side on index futures. This could turn out to be a blessing in disguise for the bulls as even if they do not put in fresh money, the shorts may get squeezed out which could take the Nifty higher.

First Published:Oct 10, 2019 7:00 AM IST