The market edged higher for another session on July 3 in continuation to the prevailing trend. Upbeat global cues triggered a firm start and rotational buying across heavyweights kept the tone positive till the end. Consequently, the Nifty index settled closer to the day’s high at 19,322.55 levels; up by 0.70 percent. Most of the sectoral indices traded in line with the benchmark wherein energy, FMCG and metal were among the top gainers. (Blue bars show volume and golden bars open interest (OI).)
2/5
On the option front, put writers were dominant for the day. “The trend is strongly still up and we can expect another 100 to 200 points before we see some consolidation that can happen around the 19,400-19,500 levels. The Nifty base has shifted to 18,600 now, and any profit booking that one sees should be treated as a buying opportunity until 18,600 gets taken out. As the Nifty gets close to 19,500, choose to switch your longs to Hedged longs to turn a little cautious purely from a time point of view and not a significant price correction,” 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
Bank Nifty has witnessed a strong bullish trend with the bulls dominating the market. It successfully surpassed the hurdle of 45,000, indicating the strength of the upward momentum. “With the resistance level now turning into support, it suggests a positive outlook for the index. Traders and investors should maintain a buy approach, taking advantage of the bullish sentiment. However, it is important to note that the next resistance level is at 45,500, where fresh call writing has been observed. This indicates a potential hurdle that may slow down the upward movement of the index,” 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
HPCL saw a long buildup with open interest rising 19 percent. A long build-up is a bullish sign that happens when open interest and volume increase with the rise in share price. IDFC, L&T Financial Holdings and Canara Bank were others that saw a heavy long buildup. (Bars reflect change in OI during the day. Red bars show call option OI and green put option OI.)
Bata India was among those that saw a short buildup with open interest jumping 19 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.)
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.
