The Nifty50 continued its journey upwards to a new all-time
high of 10,690 and ended the week with gains of 1 percent. Incremental long
built-up of 13 percent was witnessed during the week.
The Nifty options data signifies the highest accumulation in
10500 PE of 81 lakh shares. Close to 15 million shares open interest (OI) is
outstanding in the vicinity of 10500-10600 puts indicating vital support zone
for Nifty.
Call writers remain relatively sideways as resistance beyond
10700 is placed straight at 11000. Maximum OI for Nifty is seen at 11000 CE
with 47 lakh shares.
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During the week, significant OI of 50 lakh shares were added
in Put strike of 10600 followed by 10500 strikes of 31 lakh shares.
Call writers shifted their position higher from 10500-10600
to 10700-10900. Further decoding Participant activity in the Index Options it
reveals that in the last 1 week, FII added 30496 contracts on net Put short
side and 61105 contracts on net Call long side indicating their positive bias.
graph1
On the other end, the client (retails) created a bearish
view by adding net put long of 85432 contracts and net call short of 56501
contracts. PRO participant added net Put short of 58734 contracts and net call
short of 4605 contracts.
India VIX, a barometer of riskiness, continues to gyrate in
the band of 12-14 percent reconfirming the strength in trend.
graph2
PCR-OI strike wise too support the bullishness. 10500 strike
PCR moved higher from 1.66 to 3.64. 10600 strike PCR stands a 1.93
substantiating the strength of the trend.
Bank Nifty futures continued to move higher and ended the
week with the gain of 0.50 percent and OI accumulation of 23 percent. The index
made a new high of last 6 weeks at 25803. Bank Nifty options data suggest
activity near 26000-26200 CE and 25700-25500 PE.
Large heavyweight banking stocks are also witnessing
accumulation. With range breakout in Bank Nifty, it is expected to move higher
towards 26100-26200. Thus a bullish strategy Bear Call Ladder is recommended.
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