F&O Manual | Traders turn to selling on Nifty rally, broader market stocks shine

After being dormant yesterday, call writers were dominating the trade today.

Despite strong global cues, some selling on top put the benchmark indices under pressure on May 16. The broader market, however, continued to see bullish momentum lifting the overall mood.

As of 11.30am, the Nifty was down 36 points or 0.2 percent at 18,362.60. The Nifty Midcap and Nifty Smallcap traded with gains of about a percent each.

Rahul Ghose, Founder and CEO of Hedged, an algorithm-powered advisory platform, believes 18,500 to 18,600 will be a possible resistance point for Nifty. “One could look to initiate a buy at the 18,200 level from a risk and reward standpoint. The short straddles in the Index have also moved from the 18,300 to the 18,400 level further suggesting that the trend is in place,” he said.

After being dormant yesterday, call writers were dominating the trade today. On the weekly contracts, 18,400 saw heavy call writing as it is emerging as a local resistance level for the index. Resistance is also present at subsequent strikes.

Prashanth Tapse, Senior VP (Research), Mehta Equities said technically, the biggest support for Nifty to watch out is at 18,287 mark and below the same, the benchmark index has support at 18,195 mark.

Among the individual stocks, Astral saw heavy long buildup, followed by Birlasoft, Aurobindo Pharma, and Manappuram Finance.

PVR Inox that came out with earnings on Monday saw short buildup. Traders were also seen shorting Torrent Pharma, Jindal Steel and Metropolis Healthcare.

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