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Nifty options hint max pain at 23,450; Adani Energy, UBL see short-covering

Meanwhile, NSE F&O data shows that FIIs were net sellers in Nifty futures for the sixth straight trading session on Tuesday, with net sales of 70,318 contracts in this period.

The National Stock Exchange (NSE) Nifty 50 Index ended below the 200-daily moving average (DMA) after a month, with the index now down 5.3 per cent, or 1,254 points, from a high of 24,792 in just five trading sessions. It closed at 23,587.50 on Frida

Rex Cano Mumbai

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The NSE Nifty futures logged its first gain in five days on Tuesday with the January contract closing 0.5 per cent higher at 23,272 alongside a 0.8 per cent decline in open interest (OI). Among other key indices - the Bank Nifty futures and MidCap Nifty futures gained 1.5 per cent and 1.9 per cent, while the OI dipped by 3.8 per cent and 3.5, respectively.    Trading volume in Nifty futures were on the lower-side compared to the last two trading sessions. Nifty futures saw trade of around 1.95 lakh contracts as against an average of 2.70 lakh contracts in the preceding two trading sessions.  Futures & Options (F&O) data from NSE shows that foreign institutional investors (FIIs) were net sellers in Nifty futures for the sixth straight trading session yesterday. FIIs have net sold 70,318 contracts of Nifty futures in the last six days.  On the contrary, FIIs have net bought 901 contracts of Bank Nifty futures, while selling 3,001 contracts of MidCap Nifty futures during the same period. Data shows that FIIs bias towards Nifty and MidCap Nifty seems bearish at the moment.  What does the option data suggest?  The Nifty options data underscores a range-bound sentiment, with aggressive positions established at both 23,500 and 23,000 strikes, reflecting a continued battle between the bulls and the bears, recommends Dhupesh Dhameja, Derivatives Analyst at SAMCO Securities in a note.  ALSO READ: Nifty SmallCap index can break 22-month up trend; MidCap index may tank 12%  Open interest at the 23,500-strike call ballooned to 1.10 crore contracts, affirming its role as a significant resistance level. Conversely, the 23,000-strike put amassed 1.11 crore contracts, reinforcing its standing as crucial support.  The noticeable increase in put positions hints at growing bullish sentiment. The Put-Call Ratio (PCR) climbed from 0.59 to 0.79, reflecting a cautious yet improving market sentiment. The "max pain" point at 23,450 suggests limited downside risk in the near term, Dhupesh added.  How are FIIs, Retail positioned?  According to the NSE F&O data, FIIs long-short ratio in index futures stands at 0.2; implying presence of 5 short positions in index futures for every long trade. Whereas, retail investors hold 2 long bets in index futures for every short trade.  Stock Action  Among individual stocks, Adani Energy Solutions, Indian Bank, KEI Industries, United Breweries (UBL) and NCC witnessed significant short-covering on Tuesday. Adani Energy Solutions stock zoomed nearly 12 per cent on the back of almost 12 per cent fall in open positions.  ALSO READ: Siemens witnessed its steepest fall in 30-day period, down 28%; what next?  Similarly, Indian Bank soared 6.4 per cent on Tuesday alongside a 10.3 per cent decline in OI. KEI, UBL and NCC also logged gains up to 4 per cent each yesterday while the OI at the respective counters dipped around 9 per cent.  On the other hand, HCL Technologies saw a build-up of short positions in the January series. The stock cracked over 8 per cent on the back of 19.4 per cent increase in OI. Persistent Systems, Dr Lal Path Labs and Varun Beverages too registered a dip of around 2 per cent each alongside up to 14.5 per cent rise in open interest. 

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First Published: Jan 15 2025 | 9:00 AM IST

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