 "Check FII, Retail, Proprietary trading bets in F&O at the start of the week")
Futures & Options (F&O) Insights for Monday, October 14, 2024: The NSE Nifty 50 index has been hovering around the 25,000-mark for the last few trading sessions. The trading volumes have been on the lower side in the last few days.
However, as the results season picks up momentum stock specific action is expected to guide market sentiment. Among the key participants; FIIs have taken a bearish stance in the F&O segment, mainly Bank Nifty. Whereas, retail and proprietary traders are bullish.
Here's what happened in the F&O segment on Friday:
The NSE Nifty October futures dipped 0.1 per cent, alongside a 35-point dip in premium and 1.4 per cent decrease in open interest.
From a technical standpoint, the 50-DEMA has been a significant barrier in the short term, positioned around 25,050 - 25,080, and a decisive breakthrough above this level would be instrumental in accelerating the bullish momentum toward higher levels, said Osho Krishan, Senior Analyst - Technical & Derivatives at Angel One in a note.
Additionally, the intermediate resistance zone is centered around 25,250 - 25,300, aligning with the 20-DEMA, and a strong breakthrough at this level could potentially trigger the next phase of the rally from a positional perspective.
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The Bank Nifty futures shed 0.7 per cent with the premium contracting to 214 points and a marginal rise in open interest.
Technically, on the daily chart, the Bank Nifty formed a red candle, but on the weekly scale, the index formed a hammer candle. If the index sustains above the high of the hammer candle which is around 51,785, Bank Nifty could test levels of 52,500 – 52,800, said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates in a note.
Until then, sideways consolidation is likely to continue. On the downside, 50,190 will provide strong support for Bank Nifty, where the low of the hammer candle is placed, the note stated.
FII, DII, Retail: Who bought and who sold on October 11?
Foreign institutional investors (FIIs) were buyers for the first time in 9 trading sessions on Friday. As per data available from the NSE, FIIs net bought 5,149 contracts of index futures for Rs 316.07 crore.
The NSE data shows that FIIs net bought 5,613 contracts of Nifty futures for a consideration of Rs 351.72 crore. On the other hand, they net sold 402 contracts of Bank Nifty futures and 107 contracts of MidCap Nifty futures.
The data shows that FIIs open interest (OI) in Nifty futures declined by another 3.1 per cent to 3.22 lakh contracts. The OI in Bank Nifty rose by 0.8 per cent (addition to the existing short build-up) and that in MidCap Nifty by 6.4 per cent.
Pursuant to which, the FIIs overall long-short ratio in index futures further inched higher to 0.56. The ratio implies that FIIs hold nearly 2 short positions in index futures for every long bet.
Meanwhile, retail investors' raised long bets in index futures on Friday - for the 9th straight trading session. Their long-short ratio has jumped to 1.6 from 0.52 on September 27. Retail investors now hold more than 3 long positions in index futures for every 2 short trades.
Proprietary traders also remain on the bullish side. The long-short ratio, however, declined from 1.45 to 1.32 on Friday.
Whereas, domestic institutional investors (DIIs) long-short ratio in index futures remains steady at 0.64; meaning 2 long positions for every 3 short bets.
Key Insights from Nifty, Bank Nifty options data
The Nifty weekly options data shows that there is a tug-of-war between the bulls and the bears at the 25,000 Strike Price. The options pricing suggests a likely trading range of 24,850 - 25,100 on the Nifty. Break and sustained trade outside this range could trigger a sharp move on the NSE benchmark index.
On the Bank Nifty, high open interest is visible at the 51,500 and 52,000 Calls, suggesting possible resistance at 51,650 and 52,050 levels. On the other hand, highest open interest in Puts is seen at 51,000 Strike, which suggests likely support at 50,750 levels.
Stocks in F&O ban period on Monday, October 14
A total of 9 stocks are placed under the futures & options ban period today. Chambal Fertilisers, GNFC, Granules India, Hindustan Copper, IDFC First Bank, Manappuram Finance, PNB, RBL Bank and SAIL.