Informist, Thursday, Aug 11, 2022

By Joe Milton

MUMBAI – The Nifty 50 index surpassed 17700 points in early trade but failed to attract bullish bets as traders turned cautious that the upside could be limited.

The easing of inflation in the US led to a sharply higher opening for the benchmark index that touched an intraday high of 17719.30 points. 

But the headline index fell below 17700 points in early trade and stayed below that level for rest of the day finally closing at 17659 points, up 0.7%. 

Technical charts indicate strong resistance for the index beyond 17700 points, and analysts suggested that any further rise can be used to unwind long positions. 

In the call options segment of the Nifty 50 index expiring on Aug 18, the highest open interest was at 17700 points, which reaffirms the technical resistance beyond 17700 points. 

Today, open interest in the August futures of Nifty 50 rose nearly 2% to 10.9 mln, indicating no aggressive addition of long positions. 

Going forward, Nifty 50 may consolidate and profit booking may drag the index towards 17500 points, which can be used by traders to create long positions, said Ratnesh Goyal, senior technical and derivative analyst at Arihant Capital Markets. 

On the other hand, the bank stocks continue to gain which helped the Nifty Bank index outperform the Nifty 50 index. Today, Nifty Bank closed 1.6% higher at 38879.85 points. 

With significant open interest buildup seen at 39500 strike price of Nifty Bank weekly call options series expiring on Aug 18, analysts expect the index to face resistance at this level.

However, in case of any correction, the Nifty Bank index may find support at 38500 points, where traders can prefer to take long positions, analysts said. 

--Nifty 50 Aug closed at 17676, up 117.75 points; 17-point premium to spot index

--Nifty 50 Sep closed at 17746, up 119.35 points; 87-point premium to spot index

--Nifty 50 Oct closed at 17777, up 114.85 points; 118-point premium to spot index

The total turnover in the futures and options segment of the National Stock Exchange was about 211.2 trl rupees compared to 110 trln rupees on Wednesday.    

The turnover in index options was 207.9 trln rupees compared to 106.7 trln rupees on Wednesday. The total premium turnover of the index and stock options was 387.9 bln rupees compared to 383.7 bln rupees the previous session. 

HDFC Bank, ICICI Bank, Eicher Motors, State Bank of India, Axis Bank, Reliance Industries, Housing Development Finance Corp, Tata Motors, Bajaj Finance, and Coal India were among the most actively traded underlying stocks.  End

Edited by Arshad Hussain

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