Informist, Tuesday, Jan 9, 2024
By Padmini Dhruvaraj
MUMBAI – Investors added fresh short bets in the options chain expiring Thursday as the Nifty 50 erased most of its intraday gains today. Analysts said selling pressure was higher at 21800 and 21700 strike prices of the call options.
The 50-stock index had opened the day higher, taking positive cues from the global market, but fell during the second half of the session weighed down by losses in shares of financial services companies. The benchmark index closed the day at 21544.85 points, up nearly 0.2% but off the intraday high of 21724.45 points. Analysts said banking stocks came under pressure due to the weekly expiry of Nifty Financials.
“Markets gyrated sharply in volatile trades as key indices erased most of their early gains to end marginally higher amid selective buying in auto, realty, metals and oil & gas stocks, whereas banking stocks fell the most,” Prashanth Tapse, senior vice president of research at Mehta Equities, said in a note. “A sharp jump in crude oil prices and a fresh uptick in US bond yields have made investors jittery, which dampened the sentiment,” he added.
Most long bets between 21900 and 21650 strike prices were covered, while call writing was highest at 21700 strike, a technical and derivatives analyst said. The 21800 strike of the call options had the highest net open interest addition with 1.60 mln new positions. Meanwhile, aggressive call selling was seen at 22000 and 22100 strike prices.
On the put side, premiums on some in-the-money strike prices recovered. However, a similar open interest distribution across both sides of the options chain indicates indecisiveness in the market.
The 21400 strike of the put options saw the most open interest with 1.41 mln new positions. However, the premium on the contract fell 48.4% to 26 rupees. Additionally, some aggressive put selling was seen at 21200, 21100, and 21000 strikes.
“Strong put writing (bulls’ entry) supported by call writers exiting (bears exiting) was observed at 21,500 strike in Nifty 50,” Ashwin Ramani, derivatives and technical analyst at SAMCO Securities, said in a note. “Strong put writing, along with call writers exiting at a particular strike price, is usually considered as a strong bullish signal as the bulls create fresh long positions and bears square off their short positions, leading to the support becoming stronger,” he added.
The January futures contract of the Nifty 50 today closed at a premium of 83.95 points to the spot index. Open interest in the contract rose 2.4% to 12.04 mln, according to provisional data.
Going forward, analysts expect profit booking to continue at higher levels of the Nifty 50 and expect the index to find support at 21400 and face resistance at 21750 points.
–Nifty 50 Jan closed at 21628.80, up 49.25 points; 83.95-point premium to spot index
–Nifty 50 Feb closed at 21768.00, up 49.70 points; 223.15-point premium to spot index
–Nifty 50 Mar closed at 21883.65, up 31.30 points; 338.80-point premium to spot index
Adani Ports and Special Economic Zone, Polycab India, Tata Motors, Bajaj Auto, Adani Enterprises, Larsen and Toubro, Reliance Industries, DLF, and State Bank of India were the most actively traded underlying stocks. End
Edited by Ashish Shirke
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (22) 6985-4000
Send comments to [email protected]
© Informist Media Pvt. Ltd. 2024. All rights reserved.
Source: Cogencis
