Informist, Tuesday, Jun 6, 2023
By Neeshita Beura
MUMBAI – Nifty 50 recovered from the day's losses in the final half an hour of the trading session, which prompted traders to sell put options at 18500 strike price and book profits in those contracts.
Nifty 50 has to go above 18600 points and then would see some short covering, said analysts. Today, Nifty 50 ended flat at 18599.00 points.
"It's a very thin call writing at 18600 strike and there is a very high possibility that the market will attempt to cross that level to extend towards 18700-18800 zone," said Rajesh Palviya, head of technical and derivatives research with Axis Securities. Premiums at call options of 18600 strike price was down by 19.2 rupees to 61.80 rupees. Maximum open interest concentration was seen at this strike at over 11 mln.
Compared to the intraday trend, the premiums at 18600 calls rose and open interest fell. Palviya attributed the rise in premiums to short covering and the fall in open interest to call writers' lack of confidence in the market weakening any further.
On the puts front, the highest open interest concentration was at 18500 strike price. Premiums at this strike price fell by 11.7 rupees to 15 rupees and open interest fell by over 1.3 mln to 10.2 mln. As the indices fell in the cash market, traders sold puts below the 18500 strike for higher premiums, said Palviya.
Additionally, analysts are of the view that traders don't want to take large bets on the short side ahead of the Reserve Bank of India's statement on India's monetary policy due Thursday. The market is expected to move in a rangebound manner until the RBI's final decision.
For Wednesday, the support for Nifty 50 is seen at 18500 points and resistance is seen at 18700 points.
Nifty Bank's support for Wednesday is seen at 44000 and resistance for the index is seen at 44600. Today, Nifty Bank ended 0.1% higher at 44164.55 points. The index rose in the last 30 minutes of trade pulling the benchmark's higher.
The National Stock Exchange of India said today that it has revised the futures and options weekly expiry of Nifty Bank to Friday from Thursday. The new rule will be effective from Jul 7 and the first Friday expiry will be on Jul 14. In the case of monthly derivatives contracts, the expiry will be on the last Friday of the month. This comes after the BSE shifted the expiry day of Sensex and BANKEX to Friday with effect from May 12.
The June futures contract of the Nifty 50 closed at a premium of 84.95 points to the spot index today. Open interest in the contract rose 1.4% to 9.3 mln, as per provisional data.
--Nifty 50 Jun closed at 18683.95, down 12.70 points; 84.95-point premium to spot index
--Nifty 50 Jul closed at 18768.50, down 6.20 points; 169.50-point premium to spot index
--Nifty 50 Aug closed at 18847.00, down 14.45 points; 248.00-point premium to spot index
Axis Bank, Hindustan Aeronautics, HDFC Bank, Infosys, Tata Motors, Maruti Suzuki, Reliance Industries, Kotak Mahindra Bank, Tata Consultancy Services, Ambuja Cements, and Adani Enterprises were amongst the most actively traded underlying stocks. End
Edited by Maheswaran Parameswaran
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