Speciality chemical maker Deepak Nitrite was under bears’ radar on February 7 ahead of the company’s earnings announcement scheduled later in the day.
Stock price fell over 4 percent with open interest surging by 26 percent during the day and volume rising 65 percent, a clear sign of short buildup, which is bearish in nature.
Near month futures of Deepak Nitrite traded down 5 percent to Rs 1732. It was at a discount to the spot price of Rs 1739.
On technical charts, the relative strength indicator (RSI) slid below 30 level. RSI is a momentum indicator used in technical analysis, and when it falls below 30 level, the stock is considered oversold and a bearish sign.
MACD also broke below the signal line, another negative signal. Delivery volumes were highest of the month, which reflects the intensity of sell off.
Bars reflect change in OI during the day. Red bars show call option OI and green put option OI.
On the options front, 1800 level saw heavy call writing, meaning this is now a big hurdle for the stock. The same level also saw unwinding of puts. Put writers shifted their positions lower to 1600 strikes.
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