F&O Insights: See what FIIs OI, PCR data suggests; HUL, PFC, RECL in focus

Derivatives market update for Sept 10: IndiaMart InterMesh, HUL and Sun TV saw long buildup on Monday; while PFC, RECL and Granules India saw shorts added.

F&O Insights for Tuesday, September 10, 2024: As the NSE Nifty 50 index positions itself to reclaim the 25,000-mark backed by positive overseas cues. Will the Nifty 50 be able to do so, or will profit-taking set-in at higher levels?

Here's what the technical and derivatives experts recommend:

Om Mehra, Technical Analyst at SAMCO Securities recommends that a rounding bottom pattern is formed in the hourly chart near the 38.2 per cent Fibonacci retrenchment. The Nifty formed a bullish candle on a daily chart at the crucial support that corresponds with the middle Bollinger Band. Thus, the Nifty may oscillate broadly, with immediate support at 24,750 and resistance at 25,180.

 

Meanwhile, Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates Ltd believes that the Nifty has found support near the 34-DEMA, which is placed around the 24,720 level, and witnessed a pullback, leading to the formation of a green candle on the daily scale.

However, the Nifty is still positioned below the trend line resistance, which is around the 25,100 level. In the short term, any bounce near 25,100 should be seen as an opportunity to book profits, Hrishikesh added.

On Monday, Nifty futures recouped intra-day losses and finished 0.3 per cent higher at 24,985; at a premium of 49 points to the spot Nifty. The total open interest (OI) declined by close to 4 per cent.

On the other hand, the Bank Nifty futures surged over 1 per cent, even as the premium dipped to 149 points and OI decreased by 7.8 per cent yesterday.

Key Insights from Nifty, Bank Nifty options data:

The Nifty options market suggests that the bearish sentiment has strengthened, with call writing intensifying over put writing for the eighth consecutive day, exerting downward pressure, said Dhupesh Dhameja, Technical Analyst of SAMCO Securities in a note.

Significant open interest is seen at the 24,500 Put (53.58 lakh contracts) and 25,000 Call (30.64 lakh contracts), suggesting a bearish outlook as put writers adjust to lower levels. Active trading surrounds the 24,850-24,900 Calls and 24,800-24,700 Puts. The Put-Call Ratio (PCR) rose to 0.64 from 0.61, highlighting cautious sentiment dominated by call writers. The Max Pain Point at 25,000 remains crucial for any potential shift, the analyst added.

In case of Bank Nifty, significant open interest is observed at the 51,500 Call (32.83 lakh contracts) and 50,500 Put (24.88 lakh contracts). Active trading centred around the 51,100-51,200 Calls and 51,000-50,900 Puts. The Put-Call Ratio (PCR) rose from 0.56 to 0.84, signalling a sideways outlook with call writers still dominating at higher levels. The Max Pain Point at 51,100 will be key for any directional shift.

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 09?

As per data from the NSE, FIIs net sold 6,073 contracts of index futures on Monday for a consideration of Rs 372.61 crore. FIIs net sold 5,184 contracts of Nifty futures, and 1,298 contracts of MidCap Nifty futures; while net purchased 775 contracts of Bank Nifty futures yesterday.

FIIs seem to have added fresh shorts in Nifty futures, as the OI rose by 7,608 contracts even as FIIs net sold Nifty futures on Monday. Pursuant to which, FIIs long-short ratio in index futures dipped a wee bit to 1.78:1 – this ratio still implies that foreign investors hold more than 2 long positions in index futures for every bet on the short side of trade. The FIIs longs in index futures stood at 64 per cent as of yesterday.

At the same time, retail investors' long-short ratio in index futures stands at 0.92:1; implying near about equal amount of long and short bets in index futures. 

Meanwhile, domestic institutional investors (DIIs) long-short ratio stands at 3:%; meaning 3 long positions for every 5 short bets in index futures.

Bullish & Bearish stocks

IndiaMart InterMesh saw long buildup in trades on September 09 as the stock gained 2 per cent on the back of 17.5 per cent surge in open interest (OI). JK Cements, Sun TV and Hindustan Unilever too saw some long buildup.

On the flip side, Granules India saw shorts been added, as the stock slipped 2.6 per cent alongside a 19 per cent increase in OI yesterday. PFC, Aarti Industries, Tech Mahindra and RECL too saw short buildup.

Stocks in F&O ban period

A total of 7 stocks are placed under the F&O ban period on Tuesday - meaning taking of fresh positions in these contracts is not permitted today. Aditya Birla Fashion & Retail, Balrampur Chini, Bandhan Bank, Biocon, Chambal Fertilisers, Hindustan Copper and RBL Bank are the 7 stocks.