F&O Insights: Will Bank Nifty see short-covering? Check key levels here

Derivatives market update for Sept 11: Bank Nifty weekly options PCR stands at 0.9:1; key trigger point at 51,550. Premium in Bank Nifty futures down to 99 pts from 255 pts in just 3 trading sessions.

F&O Insights for Wednesday, September 11, 2024: Can the Nifty 50 and Bank Nifty extend the pullback in today's trade or will they succumb to weak cues from global peers? Here's what the technical and derivatives data suggest.

Even as the benchmark indices are attempting a comeback, supported by broad-based buying across sectors the mood remains cautious, with indices facing stiff overhead resistance and the looming "Bearish Engulfing" pattern from last week, said Please Rajesh Bhosale, Equity Technical Analyst at Angel One in a note.

The Nifty appears to have entered a consolidation phase with immediate support around 24,900-24,800 and resistance at 25,200-25,300. Traders should adopt a buy-on-dip, sell-on-rise strategy, while focusing on stock-specific moves for better opportunities, the analyst added.

 

Meanwhile, Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates Ltd recommends that as long as the Nifty remains below the trend line resistance, which is around the 25,150 level, caution is advised on the upside. Traders may consider creating fresh long positions only if the Nifty sustains above 25,150.

On Tuesday, the Nifty September futures rose 0.3 per cent amid a 3.2 per cent dip in open positions. The premium in Nifty futures versus the spot index remained sluggish at 42 points.

On similar lines, the Bank Nifty futures advanced 0.2 per cent, while the OI decreased by 0.7 per cent. The premium on banking index futures dipped sharply for the third straight day to 99 points as against a premium of 255 points at the end of trade on September 05.

Key Insights from Nifty, Bank Nifty options data:

The Bank Nifty is likely to be in focus today on account of the weekly options expiry. Technically, Bank Nifty is facing resistance in the zone 51,400 – 51,500. Thus, it shall be a crucial level to surpass from short term perspective, said Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas in a note.

On the downside, 50,900 – 50,800 shall be a crucial support zone from short term perspective, the analyst added.

Meanwhile, the Bank Nifty options PCR (Put Call Ratio) for today's expiry stands at 0.9:1; implying higher open interest (OI) in Calls versus Puts. Highest OI in Calls is seen at 51,500 Strike followed by 53,000 and 52,000. On the other hand, highest OI in Puts is visible at 51,000 and 50,000.

The options data hint at a likely resistance zone of 51,400 - 51,550; break and sustained trade above the same can trigger a short-covering rally towards 51,750 levels. Whereas, key intra-day support for the banking index lies at 51,070-odd levels, followed by 50,950.

In case of Nifty, options data suggest a likely trading range of 24,800 - 25,200; with interim resistance likely around 25,150, and support expected at 25,000 and 24,950 levels.

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 10?

As per data from the NSE, FIIs net bought 1,709 contracts of index futures on Tuesday for a consideration of Rs 168.90 crore. FIIs net bought 266 contracts of Nifty futures, 3,517 contracts of Bank Nifty futures and 537 contracts of MidCap Nifty futures.

There were minor addition in open interest across the key index futures yesterday. Pursuant to which, FIIs long-short ratio in index futures remained around 1.8:1 – this ratio implies that foreign investors nearly 2 long positions in index futures for every bet on the short side. The FIIs longs in index futures stood at 64.18 per cent as of September 10.

At the same time, retail investors' long-short ratio in index futures dipped to 0.88:1; implying slight bias on the short side of trade.

Meanwhile, domestic institutional investors (DIIs) long-short ratio stood at 0.58:1; suggesting 3 long bets for every 5 short positions in index futures.

Bullish & Bearish stocks

Divi's Lab saw aggressive long buildup on Tuesday with the stock rising 4.4 per cent on the back of 318 per cent rise in open interest. Syngene International, IndiaMart Intermesh, IPCA Labs and National Aluminium too saw fresh addition of positions on the long side.

On the other hand, PFC (Power Finance Corporation) saw shorts being added for the second straight trading session; as the stock declined another 2.5 per cent alongside a 6.1 per cent increase in OI. RECL and LIC Housing Finance also saw some short buildup.

Stocks in F&O ban period

These same 7 stocks are placed under the F&O ban period for the fourth straight day on Wednesday. Fresh positions in these contracts will not be permitted today as well. Aditya Birla Fashion & Retail, Balrampur Chini, Bandhan Bank, Biocon, Chambal Fertilisers, Hindustan Copper and RBL Bank are the 7 stocks.