Informist, Tuesday, Jul 18, 2023
By Anjana Therese Antony
MUMBAI – New positions were added on call options of 19800 strike price of Nifty 50 after the index managed to surpass this level during the day. However, ahead of the expiry of options contracts on Thursday, data hints that the market could be in a thin range in the absence of major triggers and due to some profit booking.
“Technically, intraday correction formation is indicating that a range bound activity is likely to continue in the near future,” penned Shrikant Chouhan, head of research – retail at Kotak Securities, in a post-market note.
Today, Nifty 50 and Sensex hit fresh historical highs during the day and ended at their all-time closing highs. Nifty 50 closed 0.2% higher at 19749.25 points and Sensex ended 0.3% up at 66795.14 points. The support for the 50-stock index is seen in the range 19700-19600 points and resistance at 19800 points.
Though some analysts had expected the Nifty 50 index to cross above its psychologically important level of 20000 points, a few of them now do not see the index closing above 19800 points in the next session. However, the index managed to surpass the crucial 19800 points level today.
On the call options’ side, bulls added new positions at and above 19800 strike price. Though the highest open interest additions were at 20300 strike price expiring Thursday, the premium of these contracts were as low as 1.50 rupees. This indicates that the bulls do not expect the 50-stock index to reach this level ahead of the expiry. However, the 19800-level contracts had the second-highest open interest additions of over 2.7 mln. The premium of these contracts rose by 11.55 rupees to 46.45 rupees.
On the puts front, the highest open interest concentration was at 19600 points. The premium fell by 23.25 rupees to 20.85 rupees. Analysts said that this acts as a strong support for Nifty 50.
In the coming sessions, the current profit booking seen during the day may continue to cap gains, a technical and derivatives analyst at a broking firm said. However, some analysts believe the overall tone in the market is positive. “While the market may be in an overbought zone, the undertone remains bullish due to India’s strong economic performance and hopes that the US rate hike cycle could be nearing the end on the back of moderating inflation,” Chouhan added.
Meanwhile, provisional data showed open interest in the July futures contract of the Nifty 50 fell marginally by 0.5% to 10.78 mln.
–Nifty 50 Jul closed at 19773.00, up 51.80 points; 23.75-point premium to spot index
–Nifty 50 Aug closed at 19866.00, up 49.60 points; 116.75-point premium to spot index
–Nifty 50 Sep closed at 19975.00, up 55.30 points; 225.75-point premium to spot index
HDFC Bank, Reliance Industries, Infosys, ICICI Bank, Polycab India, State Bank of India, Adani Enterprises, Axis Bank, Bajaj Finance, Kotak Mahindra Bank, Havells India, and Tata Consultancy Services were among the most actively traded underlying stocks. End
Edited by Deepshikha Bhardwaj
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