Options data hint 9,960 is critical level to watch

Mumbai: Bulls put up a strong defence of the 10,000 mark, which is giving hope to a few brokers that the level won’t break so easily. But, a decline of the putcall ratio (PCR) from 0.84 on Monday to 0.79 Tuesday indicates the tug-of-war between the bulls and bears.

The PCR shows that traders Tuesday did not sell as many puts (relative to calls) as they did a day earlier, implying expectations of downtrend continuing.

Options data show that Nifty has very strong support at 9,960, based on the average selling price of the 10,000 put since the current series of derivatives got under way. Brokers expect put sellers to defend that support assiduously. If that breaks, the next support kicks in at 9,800.


On the flip side, the first resistance kicks in at around 10,280 and then at 10,433. FII sold Rs 1,516 crore worth of index futures – Nifty and Bank Nifty – on Tuesday. They could have done this to hedge their portfolios.