Markets continue their struggle with a negative bias as concerns over the delay in US debt ceiling bill and decline in China’s factory activity prompted investors to trim exposure in banking and metal stocks. The strong Q4 GDP numbers failed to improve sentiment as the focus shifted to changes in the global arena. The Nifty declined 0.25 percent or 46.65 points to 18,487.75. (Blue bars show volume and golden bars open interest (OI).)
2/5
An interesting development occurred with the Nifty OI data today. The June monthly expiry which had a high concentration of sold 18500 PE, got converted to short straddles of the 18500 strike by market participants. “There was a good addition of the 18500 call OI through the day. The correction of the last few days should not be considered as a change in trend on the Index but rather a profit booking and a buying opportunity at the appropriate support level. The 18000 to 18300 demand band is currently a strong level of support for the Index which should give a bounce to the Index,” 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 remained under the control of bears as they maintained their grip on the market. Selling pressure was observed from the resistance zone around 44200, suggesting that sellers were active at that level. “If the index sustains below the level of 44,000, it could indicate further downside potential. In such a scenario, the index may witness a decline toward the support zone around 43,500-43,400,” 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
Manappuram Finance saw a long buildup with open interest rising 15 percent. A long build-up is a bullish sign that happens when open interest and volume increase with the rise in share price. India Cements, RBL Bank and Apollo Hospitals 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.)
Coal India was among those that saw short buildup with open interest jumping 63 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.
