The Indian market has seen two distinct features over the last one month: One, consistent selling by foreign institutional investors (FIIs) with Friday’s number at nearly Rs 4000 crore taking the monthly number to Rs 23,000 crore; two, despite this selling, the market has defended some key levels -- the Nifty has threatened to break 15,600 on closing basis around five times in July but bulls have managed to survive the scare.

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However, even the bulls don’t have it all. The Nifty has managed to close above 15,900 only once despite testing it five times.

The SGX Nifty is indicating a big gap-up and an opening around the 15,850-15,900 zone. But, it is the follow-through which has been missing.

If you look at the FII data in F&O, there was aggressive selling in index futures and big Call writing around 15,900. Now, this is where things get interesting. Do these shorts scamper for cover in the morning on a gap-up or will these positions continue to act as a ceiling for the Nifty?

For those not interested in Nifty, there is good news. This has been a paradise for stock traders. The broader markets have continued to outpace Nifty including in July with a 20 percent outperformance year to date. This is where the prices are being driven by the retail frenzy and from the look of things, this is not stopping any time soon.

First Published:Aug 2, 2021 8:05 AM IST