F&O data shows Nifty pivot at 23,550; Can Bank Nifty trigger a pull-back?

F&O cues for Nov 18: As long as Bank Nifty holds the 200-DEMA support near 49,900, the index could witness a pullback move towards 50,500-50,600 levels, believes Hrishikesh Yedve of Asit C. Mehta.

Futures & Options (F&O) Insights for Monday, November 18: The NSE Nifty 50 ended below the 200-DMA for the first time in the last 19 months last Thursday. The NSE index has declined more than 10 per cent from its peak and is now said to be in correction mode.  Technically, the Nifty on a daily scale has formed a doji candle near its 200-day exponential moving average (DEMA) support indicating uncertainty. The 200-DEMA is placed around 23,540. Thus, 23,500-23,540 will act as immediate support zone for the index, says Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates.  A strong break below 23,500, will push the Nifty further lower to 23,300 - 23,200 levels, where a trend line support is placed. Overall, the short-term trend is down, but as long as Nifty holds above 23,500, a pullback rally could be possible.  In the case of Bank Nifty, the index has formed an inverted hammer candle near the crucial support of 200-days exponential moving average (DEMA), indicating strength. The 200-DEMA support is placed near 49,900 and if index manages to respect it, then it could witness pullback move towards 50,500-50,600 levels, the analyst added.  Key Insights from Nifty, Bank Nifty options data  The Nifty options data reflects a bearish outlook as rising Call Writing activity from 23,600 to 24,000 highlights increasing seller strength, while the reduction in put writing signals heightened bearish sentiment, says Dhupesh Dhameja, Derivatives Analyst at SAMCO Securities.  The Put-Call Ratio (PCR) has moved up from 0.54 to 0.73, indicating cautious sentiment as sellers maintain control. The max pain level for the Nifty stands at 23,550.  In the case of Bank Nifty, options data reflects a bearish sentiment, with an increase in call writing from 50,500 to 51,000 underscores seller dominance, while the decrease in put writing highlights a more cautious, bearish outlook.  The PCR rose from 0.57 to 0.96, indicating a guarded sentiment as call writers remain influential. The max pain level for Bank Nifty stands at 51,000 levels, said the analyst from SAMCO Securities.  FII v/s Retail v/s Proprietary traders: Who is bullish/ bearish?  Foreign institutional investors (FIIs) were net sellers of 8,776 contracts of index futures for Rs 405.40 crore on Thursday. FIIs net sold 14,699 contracts of Nifty futures to the tune of Rs 868.11 crore and 709 contracts of MidCap Nifty futures for Rs 42.89 crore. FIIs, however, net bought 6,848 contracts of Bank Nifty futures for Rs 517.91 crore.  The NSE F&O data shows that FIIs open interest (OI) in Nifty futures increased by 13.1 per cent to 1.83 lakh contracts; thus implying addition of fresh short positions. The OI in Bank Nifty rose by 2.4 per cent, while in case of MidCap Nifty FIIs OI declined by 3.4 per cent.  Pursuant to which, FIIs long-short ratio in index futures inched a wee bit higher to 0.30 - this ratio implies that foreign investors hold 3 short positions in index futures for every long trade. The ratio has been around these levels since the start of the November series.  Meanwhile, retail investors' long-short ratio increased by 6 basis points (bps) to 2.13 - implying presence of more than 2 long bets in index futures for every short trade. Proprietary traders, on the other hand, decreased long bets in index futures as the ratio fell from 0.68 to 0.59.  Stocks in F&O ban period today, November 18  Aarti Industries, Aditya Birla Fashion Retail, GNFC, Granules India and Hindustan Copper are the 5 stocks placed under F&O ban period on Monday.