Pivot point for Nifty 50 index moves higher to 25,150, suggests F&O data

Derivatives market update Oct 15: In case of Bank Nifty the max pain is seen at 51,800; with the PCR rising to 1 - tilt towards a bullish bias is observed, says SAMCO Securities analyst.

Futures & Options (F&O) Insights for Tuesday, October 15, 2024: The NSE Nifty 50 index started the week on a positive note backed by buying interest IT and banking shares. In the F&O segment, retail and proprietary traders increased their bullish bets in index futures, while foreign investors remained on the backfoot.

Here's all you need to know:

The NSE Nifty October futures gained 0.7 per cent, while the OI declined by 2.3 per cent yesterday.

Technically, the Nifty formed a green candle, signalling strength. On the upside, the 21-DEMA is placed near 25,270, which can act as a short-term hurdle for the index, followed by 25,400, said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates.

 

On the downside, the Nifty will find immediate support near 24,900. Thus, as long as the index holds above 24,900, a "buy on dips" strategy should be pursued, the analyst added.

Meanwhile, the Bank Nifty futures rallied 1.3 per cent amid a 7.2 per cent dip in OI. Technically, the Bank Nifty sustained above the high of the hammer candle around 51,785, triggering fresh bullishness. Bank Nifty could test levels of 52,500 – 52,800 in the short term, said Hrishikesh Yedve.

FII, DII, Retail: Who bought and who sold on October 14?

Foreign institutional investors (FIIs) were buyers of index futures worth Rs 159.42 crore on Monday. As per data available from the NSE, FIIs net bought 110 contracts of index futures.

The NSE data shows that FIIs net sold 10,184 contracts of Nifty futures for a consideration of Rs 642.31 crore, and sold 63 contracts of MidCap Nifty futures for Rs 4.14 crore. On the other hand, they net bought 10,322 contracts of Bank Nifty futures for a consideration of Rs 803.64 crore.

The data shows that FIIs open interest (OI) in Nifty futures declined by another 2.5 per cent to 3.14 lakh contracts. FIIs OI in Nifty futures has declined by 31.5 per cent since the start of the October series. The OI in Bank Nifty dipped by 4.2 per cent, while MidCap OI was more of less unchanged.

Pursuant to which, the FIIs overall long-short ratio in index futures now stands at 0.55. The ratio implies that FIIs hold nearly 2 short positions in index futures for every long bet.

Meanwhile, retail investors' long bets in index futures inched higher to 1.63 - meaning more than 3 long positions in index futures for every 2 short trades.

Proprietary traders also remain on the bullish side. The long-short ratio, however, moved up from 1.32 to 1.34.

Whereas, domestic institutional investors (DIIs) long-short ratio in index futures remains steady at 0.64; meaning 2 long positions for every 3 short bets.

Key Insights from Nifty, Bank Nifty options data

The mid-term outlook for the Nifty Index is positive, with positional support placed near 24,700 serving as a key level to watch for traders, said Sahaj Agarwal, Senior Vice President, Head of Derivatives Research at Kotak Securities.

In the options market, there is a significant concentration of open interest at the 25,500 Call and 25,000 Put levels. The Nifty Put-Call Ratio (PCR-OI) stands at 0.705. With the current outlook, the Nifty is positioned for further gains, provided market conditions remain favourable, Sahaj added.

Meanwhile, Dhupesh Dhameja, Technical Analyst at SAMCO Securities advocates some caution. Despite the formation of a base and signs of a reversal, bearish sentiment lingers, with call writing outpacing put writing. This suggests caution among traders as sellers maintain control.

Significant open interest is concentrated at the 26,000 strike calls (65.49 lakh contracts) and 25,000 puts (66.99 lakh contracts), indicating a bullish undertone. Active trading in 25,100 - 25,200 calls and 24,800 - 24,900 puts highlights resistance near 25,100 - 25,200 and support at 24,780 - 24,890. The max pain level remains at 25,150, serving as a crucial pivot point for upcoming moves, the analyst added.

In case of Bank Nifty, significant open interest is seen at the 53,000 strike calls (24.82 lakh contracts) and 51,000 puts (28.55 lakh contracts). Trading activity in the 51,800 - 51,900 calls and 51,600 - 51,700 puts suggests resistance near 51,900 - 52,000 and support between 51,500 - 51,700, reflecting growing bullish sentiment, said Dhupesh Dhameja.

Increased put writing at 51,500 - 51,700 indicates buyers shifting to higher levels, while call unwinding signals emerging bullish momentum. The put-call ratio (PCR) surged to 1.00 from 0.69, highlighting a bullish tilt as put writers take charge. The max pain level at 51,800 serves as a key pivot.

Bullish & Bearish stocks

Among individual F&O stocks, IndiaMart InterMesh and Tech Mahindra witnessed long build-up as the stocks advanced 1 per cent and 3 per cent, respectively, alongside 23 per cent and 7 per cent increase in open interest. Page Industries, Persistent Systems and MphasiS also saw some buying interest.

On the other hand, Tata Chemicals tumbled over 7 per cent while the OI soared over 24 per cent. Bandhan Bank, Indian Energy Exchange (IEX), Indraprastha Gas and Colgate Palmolive also witnessed selling pressure.

Stocks in F&O ban period on Tuesday, October 14

A total of 12 stocks are placed under the futures & options ban period today. Chambal Fertilisers, GNFC, Granules India, Hindustan Copper, IDFC First Bank, IEX, Manappuram Finance, National Aluminium, PNB, RBL Bank, SAIL and Tata Chemicals.