F&O View: Fresh Call writing at 7,200 and 7,300 may put brakes on rally
The index reclaimed its crucial level of 7,100 and was trading around its next crucial resistance level of 7,150.
By Kshitij Anand, ET Online | Updated:
NEW DELHI: The Nifty50 managed to stage a smart rally on Tuesday, a day after the Union Budget 2016. However, fresh Call writing at strike prices 7,200 and 7,300 might put brakes on the post-budget rally.
The index reclaimed its crucial level of 7,100 and was trading around its next crucial resistance level of 7,150. Fresh Call writing was seen at strike price 7,200 (12.7 lakh contracts were added), which takes the total Call open interest to 43 lakh contracts, and at strike price 7,300 (9.9 lakh contracts were added) which showed total accumulation of 39.8 lakh contracts.
However, strike 7,500 will pose as key hurdle for the index if it manages to cross the 7,200 and 7,300 levels. The index has a total Call open interest of 51.2 lakh contracts.
“The short-term trend seems to have turned flat from the strong bearish cues we had witnessed hitherto, global cues are also holding up for the time being,” said Nikhil Kamath, Co-Founder & Director, Zerodha.
“The deep intraday correction on the Budget Day to 6,850 would have taken out a lot of the froth from the market. We expect a short term rally in the markets which could move the Nifty50 back above 7,250,” he said.
Foreign institutional investors (FIIs) sold equities to the tune of Rs 2,018 crore on the Budget day. While in index futures, they bought of worth Rs 668 crore with fall in open interest, indicating short covering in last trading session.
In Index Options front, FIIs were marginal buyers with significant rise in OI. In Call options, strike prices 7,200 and 7,300 were quite active and they also added fresh buildup. In Put options, strike prices 6,500 (added 4.9 lakh contracts) and 6,800 (7.6 lakh contracts) saw some fresh build-up.
“The maximum OI in the current series is visible in the Call option of strike price 7,500 and Put option of strike price 7,000. From the last two trading sessions, FIIs have been net buyers in Index Futures, these are positive sign," Angel Broking said in a report.
"We believe Nifty50 may show strength, trade with a positive bias," the report said.
F&O trends: A fall in price with the rise in open interest suggests short buildup. Here is a list of top stocks where short positions are building up.
A rise in price with a fall in open interest suggests short buildup. Here is a list of top stocks where short positions are building up.
The index reclaimed its crucial level of 7,100 and was trading around its next crucial resistance level of 7,150. Fresh Call writing was seen at strike price 7,200 (12.7 lakh contracts were added), which takes the total Call open interest to 43 lakh contracts, and at strike price 7,300 (9.9 lakh contracts were added) which showed total accumulation of 39.8 lakh contracts.
However, strike 7,500 will pose as key hurdle for the index if it manages to cross the 7,200 and 7,300 levels. The index has a total Call open interest of 51.2 lakh contracts.
“The short-term trend seems to have turned flat from the strong bearish cues we had witnessed hitherto, global cues are also holding up for the time being,” said Nikhil Kamath, Co-Founder & Director, Zerodha.
“The deep intraday correction on the Budget Day to 6,850 would have taken out a lot of the froth from the market. We expect a short term rally in the markets which could move the Nifty50 back above 7,250,” he said.
ADVERTISEMENT
Foreign institutional investors (FIIs) sold equities to the tune of Rs 2,018 crore on the Budget day. While in index futures, they bought of worth Rs 668 crore with fall in open interest, indicating short covering in last trading session.
In Index Options front, FIIs were marginal buyers with significant rise in OI. In Call options, strike prices 7,200 and 7,300 were quite active and they also added fresh buildup. In Put options, strike prices 6,500 (added 4.9 lakh contracts) and 6,800 (7.6 lakh contracts) saw some fresh build-up.
“The maximum OI in the current series is visible in the Call option of strike price 7,500 and Put option of strike price 7,000. From the last two trading sessions, FIIs have been net buyers in Index Futures, these are positive sign," Angel Broking said in a report.
"We believe Nifty50 may show strength, trade with a positive bias," the report said.
ADVERTISEMENT
F&O trends: A fall in price with the rise in open interest suggests short buildup. Here is a list of top stocks where short positions are building up.
ADVERTISEMENT
A rise in price with a fall in open interest suggests short buildup. Here is a list of top stocks where short positions are building up.
Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
Bookmark or read stories offline -
Download ET Markets APP
Download ET Markets APP
ADVERTISEMENT
