Nifty 50 consolidating in thin range ahead of monthly F&O expiry

F&O cues for Oct 31: The NSE Nifty 50 index is seen consolidating in the 24,100 - 24,500 range for the last few trading sessions.

Futures & Options (F&O) Insights for Thursday, October 31: The NSE Nifty 50 index seems trapped in the 24,100 - 24,500 trading range ahead of the October derivatives expiry. 

 

Apart from the monthly expiry session, Thursday is also the last trading day for Samvat 2080. The Nifty had surged up to 25 per cent in Samvat 2080. On Friday, the NSE and BSE will be conducting a special 'Muhurat trading' session from 6 pm - to 7 pm to welcome Samvat 2081. 

 

On the technical front, the Nifty formed a small red candle near the 100-Day Exponential Moving Average (DEMA), signalling strong resistance around 24,470 - 24,500 levels. If the index sustains above 24,500, it may extend gains to the 24,600 – 24,700 range, with 24,070 acting as key support, explained Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates.

 

 

Meanwhile, the Bank Nifty structure remains positive and the index will find support around 51,400 - 51,200 range; on the higher side, 52,200 - 52,500 looks like a strong supply zone for the index, said Aditya Agarwal Head of Derivatives & Technical Analysis at Sanctum Wealth.

 

Key Insights from Nifty options data

 

In the options market, open interest build-up remains significant at the 24,500 Call and 24,000 Put levels. The Nifty Put-Call Ratio (PCR-OI) has shifted slightly to 0.798, suggesting a moderate tilt towards calls, which indicates cautious optimism, said Sahaj Agarwal, Senior Vice President, Head of Derivatives Research at Kotak Securities.

 

This support, along with a steady PCR level, keeps the outlook constructive for continued recovery as long as Nifty holds above the 24,100 mark. A breakout above 24,500 levels could trigger further bullish momentum, signalling an opportunity for enhanced buying activity, Sahaj added.

 

FII v/s Retail v/s Proprietary traders: Who is bullish / bearish?

 

Foreign institutional investors (FIIs) were net sellers of index futures on Wednesday; they net sold 18,474 contracts worth Rs 1,465.16 crore.

 

The NSE data shows that FIIs net sold 18,940 contracts of Bank Nifty futures to the tune of Rs 1,491.95 crore, and 369 contracts of MidCap Nifty futures for Rs 23.14 crore. FIIs, however, net bought 219 contracts of Nifty futures worth Rs 12.50 crore.

 

The data shows that FIIs open interest (OI) in index futures declined by another 7.4 per cent to 4.25 lakh contracts. FIIs OI in Nifty futures dropped by 4.5 per cent and in Bank Nifty by 16.9 per cent.

 

Pursuant to which, the FIIs long-short ratio in index futures dipped to 0.55. This ratio implies that FIIs hold 2 short positions in index futures for every bullish bet.

 

Meanwhile, retail investors' long-short ratio in index futures rose to 1.82; whereas that of proprietary traders moved 3 basis points higher to 0.63.

 

Stocks in F&O ban period on Thursday, October 31

 

IDFC First Bank, IndiaMart InterMesh, PNB and RBL Bank are the 4 stocks placed under F&O ban period today.