 "F&O Insights: Options data hint Nifty may fall to 24,500; FIIs pare longs")
F&O Insights for Monday, September 09, 2024: Indian equity market witness selling pressure on Monday owing to weak cues from Asian peers. Nikkei, Hang Seng and Taiwan benchmark indices had tumbled up to 2 per cent each, while Kospi was down 1 per cent this morning.
Technically, the Nifty broke the 25,000-25,100 support zone on Friday, forming a bearish engulfing candle on the weekly scale. On the daily chart, Nifty closed below its 21-Day Exponential Moving Average (DEMA), indicating further weakness, said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates Ltd in a note.
The next major support is near 24,480, where the 50-DEMA is positioned. In the short term, any bounce should be seen as an opportunity to book profits, the analyst added.
Meanwhile, in the derivatives segment, the Nifty September futures plunged 1.2 per cent on Friday on the back of a sharp dip in premium. The Nifty futures premium fell from Rs 92 to Rs 54; alongside a 4.1 per cent decline in the open interest (OI); indicating lack of buying support at lower levels.
Similarly, the Bank Nifty September futures dropped 1.7 per cent, with the premium slipping from Rs 255 to Rs 204. However, the OI in Bank Nifty futures rose by 5.2 per cent, suggesting possible buildup of short positions.
Key Insights from Nifty, Bank Nifty Options data:
For this week's expiry, the Nifty options PCR (Put Call Ratio) stands at 0.6:1; revealing higher open positions in Calls versus Puts.
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Aggressive Call writing was seen at 25,000 and 25,100 Calls, with notable buildup at 24,900, 25,200 and 25,300 Calls as well. Among Puts, highest OI is seen at 24,500; with unwinding at higher Strike Puts.
The Nifty options market suggests a likely bearish bias for now, with a possibility of the index dipping towards 24,500 levels; with some support expected around 24,700 levels.
In case of the Bank Nifty, the weekly PCR stands at 0.55; significant open interest is observed at the 51,500 Call (2.88 lakh contracts) and the 51,000 Call (2.04 lakh contracts). Active trading was seen around 51,100-51,800 Calls. In case of Puts, highest OI is seen at 50,000 followed by 48,000.
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 September 06?
As per data from the NSE, FIIs net sold 47,277 contracts of index futures on Friday for a consideration of Rs 3,106.80 crore. FIIs net sold 35,402 contracts of Nifty futures, 10,621 contracts of Bank Nifty futures and 1,064 contracts of MidCap Nifty futures.
In the process, FIIs were net sellers in Nifty futures for the sixth straight trading session. Their overall OI in Nifty futures declined to 3.75 lakh contracts as against almost 4.20 lakh on September 03.
Pursuant to which, FIIs long-short ratio in index futures stands at 1.8:1 – this ratio implies that foreign investors hold less than 2 long positions in index futures for every bet on the short side of trade. The FIIs long-short ratio in index futures had reached a high of 2.6:1 on August 30, with FIIs holding up to 72 per cent OI on the long side. In comparison, FIIs longs in index futures now stands at 64.7 per cent as of Friday.
On the other hand, retail investors' have exited short positions, with the long-short ratio in index futures now rising to 0.96:1; implying an equal amount of longs versus short bets in index futures.
Meanwhile, domestic institutional investors (DIIs) positions added fresh bets on the short side of trade in index futures on Friday, they net sold 14,755 contracts. DIIs long-short ratio in index futures rose to nearly 1:2; meaning 1 long position for every 2 shorts in index futures.
Stocks in F&O ban period
Stocks in F&O ban today
A total of 7 stocks are placed under the F&O ban period. Taking of fresh positions in Aditya Birla Fashion & Retail, Balrampur Chini, Bandhan Bank, Biocon, Chambal Fertilisers, Hindustan Copper and RBL Bank is prohibited on Monday. Investors can only exit existing holdings in these 7 stocks.
A total of 7 stocks are placed under the F&O ban period. Taking of fresh positions in Aditya Birla Fashion & Retail, Balrampur Chini, Bandhan Bank, Biocon, Chambal Fertilisers, Hindustan Copper and RBL Bank is prohibited on Monday. Investors can only exit existing holdings in these 7 stocks.