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Informist, Thursday, Dec. 26, 2024

 

By Anshul Choudhary

 

MUMBAI – Options data suggest the Nifty 50 is likely to rise, after having fallen 5% last week, but gains are seen to be capped with immediate resistance at 23800-24000 points. Though the index hasn't recovered from last week's slump, it has seen marginal rise this week, which has raised hope of gains in the coming sessions.

 

However, analysts are not hopeful markets would hold on to gains amid a lack of any major trigger. High stock valuations, slowdown in earnings growth, and selling by foreign investors have made analysts cautious on the market with some saying the consolidation may last for a month.

 

"Options data suggests a broader trading range in between 23200 and 24200 zones while an immediate range between 23500 and 23900 levels," Chandan Taparia, head of equity derivatives and technicals as Motilal Oswal Financial Services, said in a note. He said technical charts show limited upside potential from here. The Nifty 50 closed at 23750.20, up 0.1%, on Thursday.

 

For call options expiring next week, data shows the addition of long bets, but that came on the back of a marginal rise in premiums. The 23800-24000 strike prices saw a significant addition of open interest, which is likely to act as resistance going forward.

 

On the put side, open interest at 23800 strike prices doubled to 4.6 mln contracts, while premiums rose nearly 6%, indicating an addition of short positions. Premiums and open interest also rose at 23500 strike prices, which is being seen as a strong support of the Nifty 50. Overall, traders bought in-the-money put options.

 

The January futures contract of the Nifty 50 closed at a premium of 173.75 points to the spot index. Open interest in the contract rose 45% to 11.34 million, according to provisional data.

 

--Nifty 50 Jan closed at 23923.95, down 5.30 points; 173.75-point premium to spot index

--Nifty 50 Feb closed at 24070.00, down 3.85 points; 319.80-point premium to spot index

 

Reliance Industries, HDFC Bank, ICICI Bank, State Bank of India, Tata Motors, Axis Bank, Infosys, Kotak Mahindra Bank, Tata Consultancy Services, Bajaj Finance, and Adani Enterprises were the most actively traded contracts.  End

 

Edited by Deepshikha Bhardwaj

 

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