 "Nifty, Bank Nifty consolidate amid lower volumes; 14 stocks in F&O ban")
Futures & Options (F&O) Insights for Wednesday, October 16, 2024: The NSE Nifty 50 index yet again failed to hold on the intra-day gains, and eventually settled around the 25,000-mark on Tuesday.
October is a longer monthly expiry, with yet another two weeks to go. Trading volumes off late have been on the lower side. Overall, retail and proprietary traders are seen holding bullish positions, while FIIs are on the short side of trade.
Here's all you need to know:
The NSE Nifty October futures dipped 0.3 per cent yesterday while the (open interest) OI rose by 0.8 per cent.
Technically, on the daily chart, the Nifty formed a red candle, indicating selling pressure at higher levels. On the upside, the 21-day Exponential Moving Average (21-DEMA) is positioned near 25,250, which will act as an immediate hurdle for the Nifty, followed by 25,400, said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates in a note.
Meanwhile, the Bank Nifty futures ended 0.2 per cent higher while the OI declined by 0.8 per cent.
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The Bank Nifty witnessed a breakout around 51,800 levels and has managed to sustain above this breakout, indicating strength. Based on this breakout, Hrishikesh Yedve expects the Bank Nifty to test levels of 52,500 – 52,800 in the short term.
On the downside, 51,000 offers strong support, where the 100-day Exponential Moving Average (100-DEMA) is placed. Thus, as long as the Bank Nifty holds above 51,000, a "buy on dips" strategy is recommended, he explained.
FII, DII, Retail: Who bought and who sold on October 15?
Foreign institutional investors (FIIs) were sellers of index futures worth Rs 411.87 crore on Tuesday. As per data available from the NSE, FIIs net sold 7,482 contracts of index futures.
The NSE data shows that FIIs net sold 11,377 contracts of Nifty futures for a consideration of Rs 714.63 crore; while net bought 3,771 Bank Nifty contracts worth Rs 294.54 crore, and 159 contracts of MidCap Nifty futures for Rs 10.43 crore.
The data shows that FIIs open interest (OI) in Nifty futures dipped a wee bit by 165 contracts, and mere 57 contracts in case of MidCap Nifty futures. Similarly, Bank Nifty OI was down 1 per cent at 1.35 lakh contracts.
Pursuant to which, the FIIs overall long-short ratio in index futures decreased by 2 basis points to 0.53. The ratio implies that FIIs hold nearly 2 short positions in index futures for every long open position.
Meanwhile, retail investors' long-short ratio in index futures remained steady at 1.63 - meaning more than 3 long bets in index futures for every 2 short trades.
Proprietary traders increased their bullish bets by 9 basis points, as their long-short ratio rose to 1.43. Proprietary traders also hold near about 3 long positions in index futures for every 2 bearish bets.
Whereas, domestic institutional investors (DIIs) long-short ratio in index futures remains steady at 0.63; meaning 2 long positions for every 3 short bets.
Key Insights from Nifty, Bank Nifty options data
Despite forming a base and showing signs of reversal, the bearish sentiment persisted as call writing outpaced put writing, signalling traders' caution. Significant open interest is concentrated at the 25,200 strike calls (91.41 lakh contracts) and 25,000 puts (60.86 lakh contracts), indicating a bearish bias, said Dhupesh Dhameja, Technical Analyst at SAMCO Securities in a note.
Active trading in the 25,100 - 25,200-call range and 24,800 - 24,900 put range highlights resistance near 25,100 - 25,200 and support at 24,700 - 24,900. The on-going tug-of-war at these levels will likely shape the index's future direction.
The put-call ratio (PCR) decreased slightly to 0.56 from 0.70, suggesting call writers maintain control. The max pain level remains at 25,100, serving as a pivotal point for the next move.
In case of Bank Nifty, notable open interest is concentrated at the 52,000 strike calls (37.53 lakh contracts) and 51,000 puts (34.79 lakh contracts). Activity around the 51,800 - 51,900 calls and 51,600 - 51,700 puts indicates resistance near 51,900 - 52,000 and support at 51,500 - 51,700, reflecting increasing bullish sentiment, highlighted Dhupesh Dhameja.
Enhanced put writing at 51,500 - 51,700 suggests that buyers are moving to higher levels, while call unwinding hints at emerging bullish momentum. The put-call ratio (PCR) declined to 0.89 from 1.01, pointing to a slight bearish tilt as call writers gain the upper hand. The max pain level at 51,900 is a crucial pivot.
Bullish & Bearish stocks
Among individual F&O stocks, Deepak Nitrite, PVRInox and HPCL saw notable long build-up. These stocks rose up to 4 per cent on the back of 13.9 per cent, 8.7 per cent and 8.6 per cent increase in OI. Page Industries and Balrampur Chini also saw some buying interest.
On the other hand, Cipla and Reliance Industries witnessed pressure. Both stocks declined around 2 per cent backed by a near 6 per cent rise in OI individually. Bajaj Auto also has seen steady decline in OI in recent days.
Stocks in F&O ban period on Tuesday, October 16
A total of 14 stocks are placed under the futures & options ban period today. Bandhan Bank, Chambal Fertilisers, GNFC, Granules India, Hindustan Copper, IDFC First Bank, Indian Energy Exchange (IEX), L&T Finance, Manappuram Finance, National Aluminium, PNB, RBL Bank, SAIL and Tata Chemicals.