Profit-taking, which was overdue for sometime happened on May 31 and traders offloaded their holdings in metals, realty and energy stocks on the back of weak Asian and European market cues. The Nifty 50 closed at 18,534, dropping 99.45 points or 0.53 percent. (Blue bars show volume and golden bars open interest (OI).)
2/5
Nifty also saw some decent call writing for Thursday's expiry and with today's OI development, the number of calls written are much higher than the number of puts being written. “A low risk trade to initiate for the expiry would be to enter the 18,600 short straddle with a bought PE of 18,500. This should be initiated when the spot price of the Index is between 18,550 and 18,600,” said Rahul Ghose, Founder & CEO – Hedged. (Bars reflect change in OI during the day. Red bars show call option OI and green bars show put option OI.)
3/5
The Bank Nifty Index saw huge unwinding in put options and addition in sold call options signalling bearishness as we head into tomorrow's expiry. “The index has support at 43,500, indicating a level where buyers have shown interest and the potential for a bounce-back. On the other hand, resistance is seen at 44,500, which is a significant level where both put and call writing is visible. This suggests that there may be a considerable number of traders with bearish and bullish expectations around this price level,” said Kunal Shah, Senior Technical & Derivatives Analyst at LKP Securities. (Bars reflect change in OI during the day. Red bars show call option OI and green bars show put option OI.)
4/5
Torrent Pharma saw a long buildup with open interest rising 69 percent. A long build-up is a bullish sign that happens when open interest and volume increase with the rise in share price. Dixon Tech, PI INdustries and Escorts were others that saw heavy long buildup. (Bars reflect change in OI during the day. Red bars show call option OI and green put option OI.)
Hindustan Aeronautics was among those that saw short buildup with open interest jumping 90 percent. The short build-up is a bearish sign that takes place when the price of a stock falls, along with high open interest and volume. (Bars reflect change in OI during the day. Red bars show call option OI and green put option OI.) Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Shubham Raj has six years of experience covering capital markets. He primarily writes on stocks with special focus on F&O and PMS-AIF industry.
