 "F&O Cues: Options data hint more gains for Nifty; 4 stocks see long buildup")
F&O Cues for September 02, 2024: The NSE Nifty 50 index has logged gains for the last 12 straight trading sessions - reportedly its longest winning streak since inception. The Nifty has surged 4.5 per cent or 1,097 points during this period.
On Friday, the Nifty September futures ended 0.4 per cent higher at 25,377, a premium of 141 points as against the spot Nifty close of 25,236. The open interest (OI) rose by 5.2 per cent, with an addition of 27,700-odd contracts.
Technically, on the daily scale, the Nifty has witnessed a breakout of a rounding bottom pattern, indicating strength. Based on this breakout, the index could advance towards the 25,500 levels in the short term, said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates in a note.
Further, if the index sustains above 25,500, Nifty could head towards the 26,000-26,250 levels, which is the target of the rounding bottom pattern, the note stated.
Meanwhile, the Bank Nifty September futures gained 0.3 per cent on Friday; while the premium declined to 312 points and OI dipped by 1.5 per cent.
Key Insights from Nifty, Bank Nifty Options data:
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The Nifty options market retained its bullish bias throughout the week, with a higher volume of Puts being written compared to Calls. Call writers have shifted their positions higher, while buying interest has emerged at lower levels, said Dhupesh Dhameja, Technical Analyst at SAMCO Securities in a note.
Significant open interest at the 25,200 Put (63.51 lakh contracts) and the 25,700 Call (43.96 lakh contracts) reflects a positive sentiment, as call writers adjust to higher levels. The Put-Call Ratio (PCR) increased from 1.21 on Thursday to 1.27, underscoring the dominance of Put writers, with the PCR rising steadily each day throughout the week. The Max Pain Point at 25,450 marks a key level that could influence near-term Nifty movements.
In case of Bank Nifty, significant open interest at the 51,500 Call (27.27 lakh contracts) and the 51,000 Put (21.54 lakh contracts), with active trading around the 51,300-51,400 Calls and 51,000-51,200 Puts was seen.
The Put-Call Ratio (PCR) has slightly increased from 0.79 on Thursday to 0.88, indicating a sideways to bearish sentiment as the index has been trading within a range of 51,400-51,000 over the past four sessions, leading to muted momentum and keeping bullish momentum in check. The Max Pain Point, concentrated at 51,400, is a critical level to watch for potential shifts in the index's direction, the note from SAMCO added.
FII, DII trading activity in F&O - Here's all you need to know about who bought and who sold in the derivatives market on August 30?
As per data from the NSE, FIIs net bought 33,327 contracts of index futures on Friday for a consideration of Rs 2,275.69 crore. FIIs net bought 20,850 contracts of Nifty futures, 11,080 contracts of Bank Nifty futures and 1,345 contracts of MidCap Nifty futures.
Pursuant to which, FIIs long-short ratio in index futures jumped to 2.6:1 – this ratio implies that foreign investors now hold more than 5 long positions in index futures for every 2 bets on the short side of trade. The FIIs longs in index futures rose to 71.94 per cent.
Meanwhile, domestic institutional investors (DIIs) marginally increased their long and short bets in index futures, as the long-short ratio rose to 0.64:1; with net longs at 38.98 per cent.
On the other hand, retail traders' increased their bets on the short side of trade, with a long-short ratio now at 0.65, thus implying retail traders now hold near about 3 short positions for every 2 long trades in index futures as of August 30.
Bullish & Bearish stocks
On Friday, Balrampur Chini, Bandhan Bank, Syngene International and Granules India witnessed long buildup, as these derivative contracts gained 2-3 per cent each backed by 86 per cent, 19.5 per cent, 12.6 per cent and 10.8 per cent increase in OI for the September series.
That apart, AU Small Finance Bank up 7.2 per cent, MFSL, MCX India and UPL were the other major gainers on August 30.
On the other hand, Dixon Technologies, Indian Hotel, Dabur India and Reliance Industries have witnessed buildup of OI on the short side of trade. These 4 stocks were down up to 1.2 per cent, while OI rose by 19.4 per cent, 12 per cent, 9.4 per cent and 6.7 per cent, respectively.
Stocks in F&O ban period
Balrampur Chini is the only stock in futures & options ban period on Monday.