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Equity Futures: Nifty 50 bounces back but traders remain cautious

Informist, Monday, Dec 26, 2022


By Vivek Kumar


MUMBAI – The near-term sentiment for the Nifty 50 is likely to remain that of sell on rise as long as the benchmark index stays below 18300 points, according to data. Analysts also said that today’s move was along expected lines and the focus would be more on sustainability.


In the options contract expiring Thursday, traders sold most call options of strike prices above 18300 points, indicating that they do not expect the index to rise beyond this level.


The premiums on 18300 points call option rose 1% and the contract witnessed maximum addition of open interest. Meanwhile, the premiums on 18350 and 18450 points call options fell around 13% and 32%, respectively.


“As long as the index does not move above 18300-18350 points level with strong momentum, it will remain a sell on rise,” said Viraj Vyas, a technical and derivatives analyst-institutional equities, at Ashika Group. “The move today was just a comeback, and it was expected,” he said.


The maximum change in open interest on the call side of the Nifty 50 was seen at 18800 points, where investors closed their positions likely because they do not expect the index moving closer to this level in the next few sessions.


The Nifty 50 closed 1.2% higher at 18014.60 points today on bargain buying after it declined 2.5% last week.


“Participants shouldn’t read much into a single day rebound and wait for the sustainability of the move.” said Ajit Mishra, vice president-technical research at Religare Broking.


On the put side of Nifty 50, the maximum addition of open interest was seen at 18000 points. The premium on this contract slumped over 56% today.


The December futures contract of the Nifty 50 ended at a premium of just 3.5 points to the spot index, as per provisional data. This is sharply lower than the 57.1-point premium it ended on Friday.


Among stocks, IndusInd Bank was the top gainer in the Nifty 50 as it rose 4.2% to 1,195.70 rupees. 


In the options contracts, aggressive buying was seen at 1,180- and 1,200-rupee call option of IndusInd Bank as their premiums soared over 400%. On the other hand, the premium on 1,240 rupee call option only rose around 16%.


“The stock is consolidating for three months now, and 1,250 rupees is a big hurdle,” Vyas said.


–Nifty 50 Dec closed at 18018.10, up 154.20 points; 3.50-point premium to spot index

–Nifty 50 Jan closed at 18128.00, up 154.70 points; 113.40-point premium to spot index

–Nifty 50 Feb closed at 18216.00, up 155.00 points; 201.40-point premium to spot index


The total turnover in the futures and options segment of the National Stock Exchange was 137.96 trln rupees, against 108.38 trln rupees on Friday.


The turnover in index options was 133.06 trln rupees compared with 102.97 trln rupees in the previous session. The total premium turnover of index and stock options was 533.94 bln rupees compared with 514.96 bln rupees on Friday.


HDFC Bank, Kotak Mahindra Bank, ICICI Bank, Reliance Industries, State Bank of India, Adani Enterprises, Axis Bank, Ambuja Cements, Bajaj Finance, Adani Ports and Special Economic Zone, IndusInd Bank, Tata Motors, and Bharti Airtel were among the most actively traded underlying stocks.  End


Edited by Maheswaran Parameswaran



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Source: Cogencis

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