The Nifty reached so close to making an all time high but still failed to make a new top. Nifty opened near the record high but profit taking in banking, energy, auto and FMCG majors gradually pushed the index lower as the day progressed however rebound in select IT and financials majors capped the damage. Finally, it settled at 18,755 levels; down by 0.37 percent. Analysts said the Bank Nifty Index is playing spoilt sport and preventing the Nifty Index from sustaining over its all-time high as a result of the head and shoulders pattern that it has on the daily chart. (Blue bars show volume and golden bars open interest (OI).)
2/5
Call writers were a dominant force today as they pushed the index lower, a stark difference from last week. “The OI data of Nifty should be taken with a pinch of salt currently as it is rapidly changing on a daily basis. On Friday, there was heavy put writing seen which was completely reversed today with heavy call writing. The best way to play the Index now is to plan for collar strategies until 18900 gets taken out decisively,” 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 weakness in Bank Nifty continued for another session. The head and shoulder pattern on the index will get negated only when Bank Nifty crosses the 44200 mark. Until then, Bank Nifty will remain in sideways territory and will try to bring the Index down. (Bars reflect change in OI during the day. Red bars show call option OI and green bars show put option OI.)
4/5
Shriram Finance saw a long buildup with open interest rising 27 percent. A long build-up is a bullish sign that happens when open interest and volume increase with the rise in share price. Jindal Steel, Dr Lalpathlabs and M&M Finance 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.)
HDFC AMC was among those that saw 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.) 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.
