F&O Cues for Wednesday, September 04, 2024: The Nifty exhibited a lacklustre trading session for the second straight day on Tuesday, even as it extended its record winning run to the 14th straight day.
The Nifty September futures edged 0.1 per cent up to 23,355, while the premium rose to 75 points yesterday. The September contract saw 0.8 per cent rise in open interest (OI).
The Nifty oscillated within a narrow range, but continues to hold above the unfilled gap created on August 30, with key support levels identified at 25,190 and 21,150, said Om Mehra, Technical Analyst at SAMCO Securities in a note.
Technically, on the daily chart, the Nifty formed a small red candle but is still holding well above the breakout of a rounding bottom pattern, indicating strength, said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates in a note.
On the downside, the 9-Day Exponential Moving Average (DEMA) and the recent breakout point of the rounding bottom pattern are positioned near 25,070. Thus, any dip around 25,070 should be used to buy Nifty. On the upside, the index may test levels of 25,500-25,600 in the near future, the analyst added.
Meanwhile, the Bank Nifty September futures jumped 0.5 per cent on Tuesday, amid a 1.1 per cent decline in OI and a sharp drop in premium to 145 points as against 211 points the day earlier.
Key Insights from Nifty, Bank Nifty Options data:
The Nifty options market hints at a balanced outlook, with its PCR (Put Call Ratio) for this week’s expiry at 1; suggesting equal amount of OI in Puts as well as Calls.
Among Calls, the highest OI for the September 05 Nifty expiry is seen at 26,000 Strike Price followed by 25,300, 25,600 and 25,700. On the other hand, in case of Puts, highest OI is visible at the 25,000 Put followed by 24,500 and 24,700 Strike Prices.
On Tuesday, fresh call writing was seen at 25,600 and 25,300, thus indicating possible resistance around 25,370 levels for now. Against this, Put writing took place at 25,200, 25,250 and 25,300 Strikes, thus suggesting possible support at 25,150 – 25,180 range in the near-term. Break and sustained trade below 25,150 can augment the selling pressure as Put writers will have to rush to cover positions.
FII, DII trading activity in F&O – Here’s all you need to know about who bought and who sold in the derivatives market on September 03?
As per data from the NSE, FIIs net bought 5,217 contracts of index futures on Tuesday for a consideration of Rs 388.96 crore. FIIs net sold 1,358 contracts of Nifty futures; while bought 4,498 contracts of Bank Nifty futures and 27 contracts of MidCap Nifty futures.
FIIs were net sellers in Nifty futures for the second straight day yesterday. Prior to this, FIIs were aggressive buyers in Nifty futures, thus indicating possible profit-taking at higher levels. However, the selling in Nifty futures was neutralised by buying in Bank Nifty futures.
Pursuant to which, FIIs long-short ratio in index futures remained steady at 2.3:1 – this ratio implies that foreign investors now hold near about 5 long positions in index futures for every 2 bets on the short side of trade. The FIIs longs in index futures stood at 70.15 per cent as of September 03.
Meanwhile, domestic institutional investors (DIIs) offloaded a chunk of Nifty futures bought in the previous trading session, with net sales of 15,863 contracts. In the process, DIIs long-short ratio in index futures dropped back to 0.7:1; implying 2 short positions for every long trade in index futures.
The retail traders also hold a similar ratio of 0.7:1 in index futures.
Bullish & Bearish stocks
JK Cement and SBI Life Insurance saw aggressive long buildup on Tuesday. Both the stock gained more than 2 per cent on the back of 24.6 per cent and 21.2 per cent increase in OI. That apart, IPCA Labs and Balkrishna Industries also saw some longs being added.
Stocks in F&O ban period
There are 3 stocks in F&O ban period today – Aditya Birla Fashion & Retail, Balrampur Chini and Hindustan Copper.
First Published: Sep 04 2024 | 9:23 AM IST
