F&O Manual | Bullish traders in race with an eye on 20,000 on Nifty

The Nifty 50 index, as of 11 am, traded up 92 points or 0.46 percent to 19,802.40. The Bank Nifty also showed promise as the index jumped 0.7 percent to 45,762.65.

The market continued to go from strength to strength on July 18 as the Q1 earnings season has thrown some positive surprises so far. Consistent foreign investor flows have also helped the market sentiments on Dalal Street.

The Nifty 50 index, as of 11am, traded up 92 points or 0.46 percent to 19,802.40. The Bank Nifty also showed promise as the index jumped 0.7 percent to 45,762.65.

Weekly option data shows put and call unwinding at below 19,600 levels as traders abandoned their positions to shift to higher levels. Point 19,800 was seen emerging as the new battlezone with traders taking straddle trades at this strike. Accumulation of puts at 19,700 and 19,750 were support for the index.

“Going forward, the sustainability above the 19,700 mark would lead to extension of upward momentum towards the psychological mark of 20,000,” said analysts at ICICI Securities in a morning note. “In the process, bouts of volatility tracking global development amid overbought conditions can not be ruled out. Thus, buy on dips would be the prudent strategy to adopt as we do not expect the index to breach key support of 19300.”

Bars reflect the change in OI during the day. Red bars show call option OI, and green bars show put option OI.

Bank Nifty, meanwhile, saw Straddle trades at 45,800 with put accumulation at 45,700 and lower strikes.

“Bank Nifty, is likely to be the stronger Index out of the two (Nifty and Bank Nifty) going forward,” said Rahul K Ghose, Founder and CEO – Hedged, an algorithm-powered advisory platform. “Level 45,200 was the major resistance which got sharply taken out yesterday and we should expect 45,900 very soon. Bank Nifty's base has shifted up to the 44,800 level from the 44,000 level.”

Among individual stocks, Zee Entertainment, LTIMindtree and L&T Financial Holdings were those that saw short buildup while Havells, BHEL and Bosch saw long buildup.

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