Informist, Friday, Dec 15, 2023
By Padmini Dhruvaraj
MUMBAI – Investors continued to buy out-of-the-money call options, expiring on Thursday, as the Nifty 50 extended its gains for the third straight session and hit a fresh all-time high of 21492.30 points.
The 50-stock index rose on the back of gains in shares of information technology and financial services companies. The benchmark index gained 1.3% today to close at a record closing high of 21456.65 points.
“Indian market ended higher on Friday, tracking firm cues from global markets on expectations of a lenient monetary policy from the US Federal Reserve,” said Avdhut Bagkar, technical and derivatives analyst at StoxBox.
A technical and derivatives analyst at a domestic firm said call addition was highest at 21400 and 21500 strike prices, while heavy put writing was seen at 21100 and 21200 strike prices.
The 21700 strike price call option had the second-highest net change in open interest with 1.89 mln new positions with premium rising 197% to 45 rupees. Meanwhile, some aggressive call selling was seen at the 22000, 22200, and 22300 strike prices. The 22200 strike price has the highest open interest of 3.45 mln new contracts.
On the put side, premiums across strike prices fell, mirroring the bullish sentiment in the market. The 21300 strike price had the highest net change in open interest with 7.24 mln new positions, while its premium fell 58.8% to 52 rupees. Additionally, some aggressive put selling was seen at the 20650, 20000, and 18200 strike prices.
Meanwhile, the December futures contract of the Nifty 50 closed at a premium of 101.55 points to the spot index today. Open interest in the contract rose 6.47% to 13.73 mln, according to provisional data.
Going forward, analysts expect the Nifty 50 to consolidate at the current levels with a positive bias. The 50-stock index is expected to find support at 21100 points and face resistance at 21600.
“Open interest suggests Nifty has strong support at 21400. Anticipating the week ahead, we foresee the markets entering a consolidation phase,” Sheersham Gupta, director and senior technical analyst at Rupeezy said in a note.
–Nifty 50 Dec closed at 21558.20, up 230.55 points; 101.55-point premium to spot index
–Nifty 50 Jan closed at 21691.20, up 234.65 points; 234.55-point premium to spot index
–Nifty 50 Feb closed at 21801.30, up 226.80 points; 344.65-point premium to spot index
Tata Consultancy Services, Infosys, Reliance Industries, State Bank of India, Wipro, Adani Enterprises, Tata Steel, HDFC Bank, HCL Technologies, and Tata Motors were among the more actively traded underlying stocks. End
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Saji George Titus
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