F&O Manual | As market struggles, traders keep treading the neutral path

The Bank Nifty traded up 0.56 percent at 42,354.75.

The market continued to struggle for another day on April 24. As of 10.30am, the Nifty 50 traded up 7.65 points or 0.04 percent at 17,631.70. The index opened with gains but lost the plot as the day progressed.

Several traders were seen taking neutral trades. While some were bearish. Analysts said volatility will continue during this week given the expiry of April futures and options contracts on Thursday.

The bars reflect changes in open interest (OI) during the day. The red show Call option OI and the green Put option OI.

The Options data suggests traders have taken straddle trades on 17,600 and 17,650 strikes. Straddle is a neutral strategy that pays when the market stays sideways. Maximum Call writing was seen at 17,700 that will act as an immediate hurdle for the index.

“I have shorted both Nifty and Bank Nifty,” said Rajesh Sriwastava, a Bengaluru-based derivatives trader. His target for the Nifty is at 17,500 and for Bank Nifty at 41,500 by tomorrow.

The Bank Nifty traded up 0.56 percent at 42,354.75.

“Technically, the Nifty is likely to get support at 17,443, while confirmation of strength can be seen only above the 17,863 mark. For the Bank Nifty, make-or-break support is seen at 41,799 mark,” said Prashanth Tapse, Senior VP (Research), Mehta Equities.

Among individual stocks, HDFC Life Insurance, Tata Consumer and Persistent Systems were among those that saw long buildup. Midcap IT stocks such as Birlasoft and OFSS were others that saw long buildup.

Long buildup refers to bullish position taken by traders, and indicated by rise in price along with open interest.

On the other hand, Vodafone Idea, ICICI Prudential Life Insurance, Sun Pharma and PVR were among those that saw short buildup.

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