Nifty pivot at 24,500; FIIs trim shorts, net buyers in F&O for last 4 days

F&O cues for Oct 29: Analysts expect the Nifty to extend gains in case of sustained trade above 24,500 levels; key support on the downside seen at 24,100.

Futures & Options (F&O) Insights for Tuesday, October 29: The Nifty and Bank Nifty futures ended higher on Monday led by gains in banking and financial shares. The spot Nifty bounced back above 24,300 levels, while the Bank Nifty ended at 51,250.

 

The Nifty chart reveals a 'Spinning bottom' pattern, indicating indecision; however, the oversold momentum indicators suggest strong support around 24,100 and 24,000 as we approach monthly expiry and a festive week, said Rajesh Bhosale, Equity Technical Analyst at Angel One.

 

If the Nifty sustains above 24,493, it could extend gains to the 24,600 – 24,700 levels. Conversely, if it sustains below 24,074, the next support lies at the 150-Day Exponential Moving Average (DEMA) around 23,960, explains Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates.

 

 

In case of Bank Nifty, the index has formed a bullish 'harami' candle on the daily chart near the 150-DEMA support, signaling strength. As per this pattern, 50,382 will serve as immediate support, and if Bank Nifty sustains above 51,590, an up move toward 52,000 – 52,500 levels could unfold, said Hrishikesh Yedve.

 

Key Insights from Nifty, Bank Nifty options data

 

In the Nifty options, there's a significant open interest (OI) build-up at the 24,500 Call and 24,000 Put. The Nifty Put-Call Ratio (PCR-OI) stands at 0.847, said Sahaj Agarwal, Senior Vice President, Head of Derivatives Research at Kotak Securities.

 

As long as the Nifty holds above 24,100 levels, the outlook remains constructive for further recovery. Traders should look for any breakout above the 24,500, as this could act as a signal for more pronounced bullish activity in the sessions ahead, Sahaj added.

 

Notable trading activity is seen within the 24,400 – 24,500 Call and 24,100 – 24,300 Put ranges, highlighting strong resistance established by call writers (Bears) in the 24,400 – 25,000 zone, while support consolidates between 24,000 and 24,300, explains Dhupesh Dhameja, Technical Analyst at SAMCO Securities.

 

The options market reveals a cautious tone, with aggressive call writing outpacing put activity, reflecting a lean toward bearish sentiment, the analyst added.

 

In case of Bank Nifty, considerable open interest is concentrated at the 52,000 Call and the 50,000 Put. Strong trading activity in the 51,500 – 51,700 call range and 51,000 – 51,400 put range suggests a standoff between buyers and sellers. A breakout beyond these levels could define the index's upcoming direction, Dhupesh said.

 

A move above 51,500 can trigger short covering in Bank Nifty and in that scenario it can move towards 51,840/ 52,200 levels, believes Aditya Agarwal, Head of Derivatives & Technical Analysis at Sanctum Wealth.

 

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

 

Foreign institutional investors (FIIs) were net buyers of index futures for the fourth straight trading session. FIIs net bought 37,594 contracts of index futures worth Rs 2,702.06 crore on Monday. The NSE data shows that FIIs net bought 11,372 contracts of Nifty futures to the tune of Rs 686.76 crore; 25,902 contracts of Bank Nifty futures for Rs 1,995.60 crore and 472 contracts of MidCap Nifty futures worth Rs 29.16 crore.

 

The data shows that FIIs open interest (OI) in index futures dropped by another 1.7 per cent to 4.79 lakh contracts, thus indicating possible closing of short positions. FIIs OI in Nifty futures contracts dipped by 0.8 per cent, and MidCap Nifty futures by 9.7 per cent. OI in Bank Nifty futures, however, rose by 0.8 per cent - implying some long build-up here.

 

Pursuant to which, the FIIs overall long-short ratio in index futures rose to 0.67. This ratio implies that FIIs hold near about 3 short positions in index futures for every 2 bullish positions.

 

Meanwhile, retail investors' long-short ratio in index futures remained steady at 1.92 - meaning nearly 2 bullish bets in index futures for every short trade.

 

Proprietary traders long-short ratio dropped to 0.49 - the lowest point since October 01. Proprietary traders' now hold 2 short positions in index futures for every long trade.

 

Stocks in F&O ban period on Tuesday, October 29

 

A total of 8 stocks are placed under the futures & options ban period today. Dixon Technologies, Escorts, IDFC First Bank, IndiaMart InterMesh, L&T Finance, Manappuram Finance, PNB and RBL Bank.