Although the open interest
for the Nifty Bank
hit its lowest since February, technical analysts expect a flat-to-positive movement on the index with a support of 23,000 level.
The Nifty Bank
ended at 23,352, up 0.6%. The index is down nearly 3% from its all-time high of 23,897.85 hit on June 22, and has shed nearly 1% in the last one month.
"One of the important observations for Bank Nifty is that the total open interest
in this rate-sensitive index plunged around 28% in the June series," said brokerage Angel Broking in a technical note.
The brokerage advised traders to exit from their longs if any and wait for fresh build-up before initiating any directional positions.
"At present, Nifty Bank open interest
is lowest since February, suggesting majority of the longs formed since the beginning of calendar year 2017 have been wiped off," said the broking firm.
However, Nitin Murarka, Head-Derivatives, SMC Global Securities sees low open interest
on the index as a positive sign.
"The open interest
on Bank Nifty is currently around 24 lakh, which is slightly low. But, it is a good sign because now you have the scope of building up fresh positions," said Murarka.
The expert sees the Nifty Bank
to settle its weekly expiry tomorrow above 23,300 level.
Going forward, the Nifty Bank
is expected to close the July expiry around 23,700 level on the expectations of a rate cut by Reserve Bank of India (RBI) in its next policy meeting on August 2.
Meanwhile, Chandan Taparia
of Motilal Oswal Securities expects the index to remain rangebound with the support seen at 23,000 level.