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Informist, Tuesday, Jul. 7, 2026

 

By Eshitva Prakash

 

MUMBAI – Traders added fresh short positions near spot levels of the Nifty 50 options contract and unwound their long positions after the 50-stock index snapped a four-day winning run Tuesday. While analysts expect more profit-taking in the near term, traders also sold some in-the-money put options, indicating that the decline in the Nifty 50 is likely to be limited. 

 

Selling call options with strike prices slightly above spot levels indicates that the Nifty 50 will continue to face resistance at 24400-24500 points going forward. Additionally, fresh buying in 24000 put contract with its premium rising 3% shows some pessimistic tone for the market Wednesday. 

 

On Tuesday, the Nifty 50 closed 0.1% lower at 24398.70 points. "The market breadth is currently quite narrow, and I don't expect a lot of upside at current levels," Nandish Shah, senior derivative analyst at HDFC Securities, said. "(India's) market has outperformed (global peers) Tuesday, considering the small decline versus the rout in global equity markets. I think the technical indicators are still positive, but a sharp rally is quite unlikely," he said. The put-call ratio remained above one, but was lower than Monday, indicating that the index retreated slightly from overbought levels, he said.

 

Shah expects the Nifty 50 to sustain above the 24200 level in the near term and to find strong resistance at 24550. Shah said he is advising investors to book profits until the Nifty 50 is below 24550 points. He expects fresh buying interest to emerge when the headline index rises above 24550 points. 

 

On Tuesday, traders sold deep out-of-the-money call contracts at 24700, 24650, and 24600 strike prices, alongside buying fresh in-the-money put options at 24600, 24500, and 24400 strike prices. Additionally, for contracts expiring Jul. 21, traders added fresh short positions to some out-of-the-money strikes. 

 

Among specific stocks, traders added fresh short positions in Trent's monthly options contract, suggesting further selling pressure for the stock after the company reported lower-than-expected provisional revenue for the June quarter. 

 

Trent, which fell the most among Nifty 50 constituents after weak provisional figures for the June quarter, saw relentless put buying at out-of-the-money strike prices. Premiums on these contracts surged manifold after over 12?cline Tuesday. Additionally, traders sold call contracts of strikes above INR 3,000, with the premium falling nearly 100%.   

 

--Nifty 50 July closed at 24410.00, down 72.90 points; 11.30-point premium to the spot index

--Nifty 50 August closed at 24503.80, down 67.20 points; 105.10-point premium to the spot index

--Nifty 50 September closed at 24676.50, down 66.50 points; 277.8-point premium to the spot index

 

HDFC Bank, Trent, Infosys, Kotak Mahindra Bank, BSE, Multi Commodity Exchange of India, Titan, Info Edge (India), Tata Consultancy Services, and Reliance Industries were the most actively traded underlying stocks Tuesday.  End

 

Edited by Saji George Titus

 

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