Informist, Tuesday, May 23, 2023
By Anshul Choudhary
MUMBAI – The Nifty 50 index ended higher for the third straight session, but lost most of the day’s gains in the final hours of trading. This prompted traders to sell call options at the 18400 strike price, which had witnessed strong demand when the Nifty 50 was above this level.
Today, the Nifty 50 closed 0.2% higher at 18348.00 points.
“There is only so much Nifty (Nifty 50 index) can go up, and I expect consolidation tomorrow (Wednesday),” said Raj Deepak Singh, head of derivatives research at ICICI Securities. The Nifty 50 is not expected to drop below 18250 even if it shows weakness on Wednesday, he added.
“18100 to 18500 is the key consolidation zone,” said Rahil Vora, derivatives and technical analyst at Axis Securities. He said call writers were firm at the 18400-18500 strike prices, which would act as resistance, while put writers are firm at 18100-18200 strike prices to support any fall.
The premium of call options at the 18400 strike price, which had risen up to 75 rupees during the day, fell to 34.60 rupees. The change in open interest at this strike price was 3.8 mln, largely unchanged from 1300 IST.
Traders initially sold put options at the 18300 strike price in the first half of the trading session, but later bought these contracts and the premium at this level recovered partially to 33 rupees.
Weakness in banks and information technology stocks in the final hours of trade led to the Nifty 50 coming off highs. Banks are expected to continue to drive momentum for the benchmark indices. In the derivatives market for the Bank Nifty, open interest on the call side as well as the put side was the highest at the 44000 strike price.
The May futures contract of the Nifty 50 closed at a premium of 10.1 points to the spot index today. Open interest in the contract rose 3.1% to nearly 10 mln, as per provisional data.
–Nifty 50 May closed at 18358.10, up 26.75 points; 10.1-point premium to spot index
–Nifty 50 Jun closed at 18434.05, up 30.25 points; 86.05-point premium to spot index
–Nifty 50 Jul closed at 18500.05, up 32.30 points; 152.05-point premium to spot index
Adani Enterprises, HDFC Bank, Reliance Industries, Adani Ports and Special Economic Zone, and ICICI Bank were among the more actively traded underlying stocks. End
Edited by Avishek Dutta
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