Market Outlook for 5th June 2025
Market Summary – 4th June 2025:
Nifty closed at 24,620.2, sustaining above key support zones with moderate bullish undertones. Institutional participation was constructive today, with DII net buying ₹2566.82 crore and FII net buying ₹1076.18 crore, showing clear interest from both domestic and foreign players on the cash side.
Participant Derivatives Data Overview:
The derivatives position data across Client, DII, FII, and Pro segments gives a mixed but cautiously optimistic outlook:
🔹 Clients
- Aggressively long on Index Puts (262,532 contracts) and holding decent longs on Stock Futures and Options.
- Their long positions outweigh shorts significantly (49.21% vs. 38.44%) — suggests retail traders are positioned defensively with a hedge in place, likely anticipating volatility.
🔹 DIIs
- Minimal derivatives positioning; largely neutral in futures and almost absent in options.
- Their presence is more dominant in the cash market, where they are net buyers, reinforcing support in the broader market.
🔹 FIIs
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Mixed sentiment:
- Long on Futures Index (1138) and Stock Futures (6534).
- Yet holding notable Index Call shorts (-29,940) and Put longs (44,096), suggesting caution despite cash buying.
- Options positioning shows they’re still hedging downside risk – this might reflect concern over global cues or upcoming data events.
🔹 Pros (Prop Traders)
- Strong long bias in Put Options (139,278 Index & 52,691 Stock) and Call Options (76,639 Index Call Long).
- Also notable shorts in Index Futures (-1,629) and Stock Futures.
- Their aggressive option play implies they are either playing volatility or expect a sideways to slightly bearish move.
Combined Sentiment Analysis:
- Total Long Contracts: 772,654
- Total Short Contracts: 772,654
- The perfect balance in total contracts is rare — suggests indecision or a buildup for a breakout in either direction.
🔸 % Wise Long: 23.11%
🔸 % Wise Short: 19.74%
This suggests a slightly bullish tilt, but with a cautious undertone due to heavy put buying by multiple participants.
🔮 Prediction for 5th June 2025:
Given the cash market inflows and overall slightly bullish derivatives bias:
- Bias: Mildly Bullish to Sideways
- Range Expectation: 24,480 – 24,800
- Key Resistance: 24,700 / 24,850
- Support Levels: 24,450 / 24,300
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Strategy:
- Short-term traders may consider dips as opportunities for intraday long entries.
- Option traders can explore Bull Put Spreads or moderate Call writing near resistance zones, anticipating limited upside.
Conclusion:
With FIIs turning buyers in cash, DIIs continuing their support, and a balanced yet hedge-heavy derivatives structure, Nifty looks poised for a consolidation with a positive bias. However, global cues and upcoming macro data will remain key catalysts.
— Option Matrix India
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