Derivatives Report 2 Aug 2023
Sensex (66459) / Nifty (19733)
Mirroring to
favorable global peers, our market started the session on a mild note and
maintained a positive stature for the initial trading hour. The benchmark then
underwent a bout of profit booking that pared down the gains and dragged the
index into negative terrain. But by the second half, the bulls came to the
rescue and restricted the downside move. Amidst the intense tug of war, the
Nifty50 index eventually concluded the day on a muted note, losing a mere
one-tenth of a percent and settled around 19730 level. Technically speaking,
Nifty refrained from any significant moves as it stayed in a slender range of
90 odd points throughout the day. The broader participation was quite evident,
which kept the traders’ fraternity busy for the entire session. From a
technical point of view, a sense of tentativeness could be seen as both bulls
and bears remain hesitant to make a conclusive move. As far as levels are
concerned, the support for Nifty lies around 19650-19600, followed by the
sacrosanct support zone of 19500. On the higher end, 19800- 20000 still looks
like a daunting task for the bulls in the near period
Nifty Bank Outlook
(45592)
The high beta index experienced a lackluster session. While
prices began with a slight positive trend, the absence of follow-up buying led
to a gradual decline in the first half. Subsequently, there was a slight
improvement during the second half, but prices eventually closed with a minor
loss of 0.13%, just below 45600. The banking index underwent its third
consecutive consolidation session. Prices managed to hold on to the key support
of 20EMA, but the expected upward momentum from this support is still missing.
As mentioned in the previous outlook, it appears that the market is awaiting a
trigger, possibly traders are opting to keep positions light in anticipation of
the key RBI policy announcement next week. In such a scenario, we should
monitor key support levels at 45300 – 45200, while immediate resistance lies at
46000 – 46300. Price movements are expected to remain within this range, and
any significant move in any direction will only occur upon breaking out of
these specified levels.
Key Levels
Support 1 – 45300 Resistance 1 – 46000
Support 2 – 45200 Resistance 2 – 46300
The Nifty futures open interest has increased by 1.34% and
Bank Nifty futures open interest has increased by 1.28% as the market closed at
19733.55. n The
Nifty Aug future closed with a premium of 79.00 point against premium of 90.15
point in the last trading session. The September series closed at a premium of
199.35 point. n The
INDIA VIX has decreased from 10.41 to 10.28. At the same time, the PCR-OI of
Nifty has increased from 1.00 to 1.34. n
Few of the liquid counters where we have seen high cost of carry are IDEA,
ZEEL, BALRAMCHIN, GMRINFRA and BIOCON.
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After a positive start the benchmark index witnessed some
profit taking to tank towards 19700. However, due to some respite in latter
half we managed to conclude the session with a negligible loss. n FIIs were marginal
sellers in the cash market segment. Simultaneously, in Index futures, they sold
worth Rs. 45 crores with a decline in open interest, suggesting unwinding of
both long and shorts. n
On the derivatives front, the key indices added mixed bets. On the options
front, decent piling of OI is seen at 19750-19950 call strikes. While on the
lower end, we hardly saw any relevant build-up except for 19700 put strikes,
which added meaningful position in yesterday’s session as well. The stronger
hands continue to sell equities and lightened up their positions in index
futures segment. Considering the strong market breath and continuous pile up of
positions in 19700 puts, we remain hopeful and expect dips to be brought into
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