FnO Datasheet December Series

It has been a wild series so far. November series has expired at 4756. Today, we have closed at 4711. More or less - a nothing series. The statistic is presented just to bring to light the fact that, we are almost overwhelmed with bearish sentiments. Most of the bears calling for a short term bottom yesterday. In this context, I would try to present my notes on December series so far. Again, the notes tries to comprehend the entire series - and will try to put today's rally into that perspective.

1. To understand December series in a perspective, we have to watch the FnO data from 21st November - 3 days before November expiry. On 21st Nov, FII OI was at 7.43L contracts and by 23rd Nov, it reached a peak of 8.76L contracts. On 24th Nov, after expiry, the OI was at 6.26L contracts - more or less all of them belong to December series. Now, the addition of those 1.3L contracts between 21st and 23rd happened in the price band 4800-4900. Now, between 25th and 28th Nov - the OI has fallen to 5.1L contracts. In this span FII bought 38K contracts - and NF moved in the price band 4680-4750. OI reduction even when they bought - indicating they have covered the shorts taken in the earlier 3 days. 
2. The second phase to be considered is from 28th Nov to 1st Dec. During the period FII bought 50K contracts - their OI increased by 50K contracts - and NF traded in the range 4750-4850. So more or less longs are added into the system. Then we rallied to 5134 by 7th December. It can be seen that, their OI has not changed much during the time - on 7th Dec, the OI is at 5.5L contracts - more or less the same as on 1st Dec. So, they got decent benefit out of the rally. 
3. The third phase to be considered is - from 7th December to 9th December. During the period NF has fallen from 5100 to 4950. During this period, FII have net sold more than 90K contracts - and their OI has decreased by 90K contracts. So, they have booked out their longs taken earlier. 
4. The fourth phase to be considered is - from 9th Dec to 15th Dec. During the period FII have sold 90K contracts their OI has increased by 90K contracts and NF has moved in the range 4750-4920. So this is the price where they have built shorts. 
5. The fifth phase is from 15th Dec to 19th Dec - where their OI remained unchanged - and they were day trading mostly.On 20th Dec, when NF made a bottom of 4540 - FII have bought only 12K contracts - which showed in the OI reduction - so they have covered their shorts. 
6. Finally, today they have net bought 66K contracts, however their OI has decreased by 50K contracts. Considering the heavy volumes in the morning around 4620 - we can almost deduce that they have covered their shorts around that zone. So, even today, their buying is mostly short covering - and not buying.
7. Well - to summarize - firstly you can see that FII are playing our market more as an FnO game rather than any investment opportunity. Secondly, we are oscillating from the mean by 200-300 point range - and we are at the mean position now. 
8. There are a few other things that are important to analyze this series. FII have been relentlessly selling in equities. They have net sold approximately 8K crore so far this month. From 9th December, till date, not even one day did they buy equities. And, during the period they have approximately sold 2L contracts in Fno - the effects of INR clearly visible.
9. On the total OI front, this month is quite interesting. We have accumulated an OI of 2.13 crore by Nov 24, the expiry date and that remains the highest OI through out the month. It can be also observed that most of the OI is built in the range 5000-4850 zone and most of the time we have traded below the range. And through out the month, only reduction in OI took place - no significant addition any time.
10. So finally after all the explanation where do we go from here? I do not know. :) On a serious note - I would want to keep my stand perfectly neutral. Here are my considerations for staying neutral. We are in the all important zone 4700-4800, where most of the action took place. Either from longs to shorts or shorts to longs. The FII OI and NF OI both are at their lowest levels in the series  - and they can be taken any where. Secondly, during the month, in the zone 4700-4800, DII have bought more than 4K crore of equities. If we assume they know what they are doing - they consider this to be an important level. However, it is important to note that most of FII shorts are in the zone 4750-4920 and we have not touched that zone still. Once, we go into that - a short covering might take it to 5K plus expiry. However, till we go into that zone - and see an evidence that shorts are covering - it might be prudent to be biased on the short side. Yeah - we are below the all important 4756 still. :)
11. You can find the entire data sheet here.