Informist, Tuesday, Nov 23, 2021
By Joe Milton
MUMBAI – After a sharp fall on Monday, the Nifty 50 bounced back today, but more follow-up buying and sustenance of the index above 17500 is crucial for further upside, analysts said.
Activity in Nifty 50 options indicates that 17500 level was closely watched as maximum addition of open interest in both call and put options was at 17500 strike price. “There was a tug of war between bulls and bears at 17500 level,” said Ratnesh Goyal, senior technical and derivative analyst at Arihant Capital Markets.
The analyst believes that sustenance of Nifty 50 above 17500 is crucial as it would pave the way for a rise towards 17700-17800 points.
Today, the 50-stock index recovered from a low of 17216.10 points, as it respected its major support of 17200 points. On the upside, the headline index touched 17553.70 points, but this did not trigger any major unwinding of positions by put writers at 17500 points.
Sellers of put options continued to hold 17500 strike price, which hints traders await to see follow-up buying in the coming sessions to decide their bets. The Nifty 50 index closed 0.5% higher at 17503.35 points.
Among sectors, Nifty Bank index gained 0.4% and closed at 37272.80 points, and traversed between an intraday high and low of 37448.75 and 36647.55 points, respectively.
Analysts expect the Nifty Bank to consolidate, and on the downside 36680 points is expected to act as a crucial support level.
Apart from banks, shares of metal companies gained sharply on the back of short covering in November futures. Open interest in the contract of Steel Authority of India, Tata Steel, Jindal Steel & Power, and JSW Steel was down 7-14% as shares of these companies gained 2-4% in the spot market.
Shares of Vedanta surged 10% and touched a one-month-high of 361 rupees on report that promoter entities increased their stake. The stock has witnessed a breakout, and Goyal expects the stock to hit 370-380 rupees in near term.
Analysts at ICICI Securities expect shares of Voltas to fall to 1,100 rupees before the expiry of December futures. The stock fell below 1,200 rupees on Monday, and the highest open interest in put options prevail at this strike price.
Since stock has violated its put base, and call writing was higher in the December series at 1,200 rupees strike price, the brokerage firm expects the stock to fall in the coming weeks.
Today, shares of Voltas closed 1.8% higher at 1,206.30 rupees.
-–Nifty 50 Nov ended at 17489.60, up 54.55 points; 13.75-point discount to spot index
-–Nifty 50 Dec ended at 17536.45, up 51.95 points; 33.10-point premium to spot index
-–Nifty 50 Jan ended at 17608.40, up 53.25 points; 105.05-point premium to spot index
Total turnover in the futures and options segment of the NSE was 69.2 trln rupees today compared to 67.23 trln rupees on Monday.
The turnover in index options was 64.1 trln rupees compared to 61.57 trln rupees in the previous session. The total premium turnover of index and stock options was about 300 bln rupees compared to 343.88 bln rupees on Monday.
Vedanta, Reliance Industries, Bharti Airtel, ICICI Bank, Infosys, Tata Steel, Tata Motors, HDFC Bank, State Bank of India, Adani Enterprises, and Steel Authority of India were some of the most actively traded underlying stocks. End
Edited by Aditya Sakorkar
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Source: Cogencis
