From today's economic times newspaper -
WEEKLY EXPIRY LIKELY AT 25,500 OR HIGHER TODAY
Bank Nifty Set to Outperform Nifty as Traders Add Bullish Bets
The Bank Nifty could continue to outperform the broader Nifty when markets open Thursday as traders have not only covered their bearish bets on weekly options but initiated huge bullish bets on the near month futures, too. Traders covered their shorts big time on near month Nifty options but seem to have retained short positions on index futures. This indicated cautious optimism on Nifty relative to Bank Nifty, where traders are more sanguine.
As debt market fears receded, those who sold Bank Nifty call options expiring Thursday covered the positions. They also raised fresh bullish bets on Bank Nifty futures expiring on October 25, causing the index to rally 3.2% to 26,324 on the spot market. The jump in Bank Nifty was accompanied by a 35% provisional jump in open positions (OI) of the futures. Also, the put call ratio (PCR) on weekly Bank Nifty options rose to 1.41 on Wednesday from 0.59 a day earlier.
Near month Nifty futures’ OI rose a meagre 5.5% but the near month options PCR rose to 1.03 on Wednesday from 0.89 on Tuesday. This caused the Nifty spot to jump 159 points to 10,460. Coupled with an almost 9% cooling off on fear gauge India Vix to 18.01 the bounce on Bank Nifty and Nifty could sustain Thursday unless there is a steeper plunge in the rupee or more bad news on the global front.
The options indicate that Bank Nifty would test 25,500 on Thursday while Nifty could test 10,500. “It’s most likely that the relief rally would continue in the immediate term,” said Chandan Taparia, derivatives analyst at Motilal Oswal Securities. He confirmed an atmosphere of “cautious optimism” had taken hold of the market.
Technical experts like Rohit Srivastava of Sharekhan by BNP Paribas and Rajesh Palviya of Axis Securities were also anticipating a technical bounce on the heavily oversold market.
Heavy short covering took place on Bank Nifty options at the 24,500 through 25,200 calls. The Nifty’s 200 DEMA is around 10,750 while that of Bank Nifty is at 26,000.
WEEKLY EXPIRY LIKELY AT 25,500 OR HIGHER TODAY
Bank Nifty Set to Outperform Nifty as Traders Add Bullish Bets
The Bank Nifty could continue to outperform the broader Nifty when markets open Thursday as traders have not only covered their bearish bets on weekly options but initiated huge bullish bets on the near month futures, too. Traders covered their shorts big time on near month Nifty options but seem to have retained short positions on index futures. This indicated cautious optimism on Nifty relative to Bank Nifty, where traders are more sanguine.
As debt market fears receded, those who sold Bank Nifty call options expiring Thursday covered the positions. They also raised fresh bullish bets on Bank Nifty futures expiring on October 25, causing the index to rally 3.2% to 26,324 on the spot market. The jump in Bank Nifty was accompanied by a 35% provisional jump in open positions (OI) of the futures. Also, the put call ratio (PCR) on weekly Bank Nifty options rose to 1.41 on Wednesday from 0.59 a day earlier.
Near month Nifty futures’ OI rose a meagre 5.5% but the near month options PCR rose to 1.03 on Wednesday from 0.89 on Tuesday. This caused the Nifty spot to jump 159 points to 10,460. Coupled with an almost 9% cooling off on fear gauge India Vix to 18.01 the bounce on Bank Nifty and Nifty could sustain Thursday unless there is a steeper plunge in the rupee or more bad news on the global front.
The options indicate that Bank Nifty would test 25,500 on Thursday while Nifty could test 10,500. “It’s most likely that the relief rally would continue in the immediate term,” said Chandan Taparia, derivatives analyst at Motilal Oswal Securities. He confirmed an atmosphere of “cautious optimism” had taken hold of the market.
Technical experts like Rohit Srivastava of Sharekhan by BNP Paribas and Rajesh Palviya of Axis Securities were also anticipating a technical bounce on the heavily oversold market.
Heavy short covering took place on Bank Nifty options at the 24,500 through 25,200 calls. The Nifty’s 200 DEMA is around 10,750 while that of Bank Nifty is at 26,000.
