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Informist, Friday, Jul. 17, 2026

 

By Eshitva Prakash

 

MUMBAI – Traders added long positions on Nifty 50 options contracts and covered their short positions after the index rose above a five-day long consolidation range Friday. Heavy demand for call contracts with up to 25000 strike price indicates that traders expect the index to rise as much as 3% from current levels by the end of this month. A sharp rise in out-of-the-money call contract purchases and a steep sell-off in put contracts across strike prices has turned the derivative chart structure to positive from its five-day long rangebound movement, analysts said. However, they expect traders to book profits before the Nifty 50 index has the chance to hit the 25000 level.

 

Despite positive technical signs, the near-term direction of the market is contingent on the June quarter earnings of major banks. Axis Bank, HDFC Bank, ICICI Bank, and Kotak Mahindra Bank will release their earnings Saturday and an underperformance from any one of these banks may be a major hurdle for this expected rally. Options data suggest mostly bullish bets for these stocks. Traders will also keep a close eye on developments in West Asia and the price of crude oil, a sharp rise in which will be a bigger trigger for the markets than strong June quarter earnings, analysts said. 

 

The Nifty 50 index ended 1.1% higher at 24334.30 points on Friday. Traders covered their short positions by purchasing in-the-money call options across 24100–24300 strike prices, supporting gains. Despite this, the advance-decline ratio was tilted towards declining stocks, which indicates a negative divergence, Vipin Kumar, assistant vice president at Globe Capital Markets said. Traders heavily sold put contracts across 24000-24200 strike prices and the open interest in the 24000 strike price rose by 1 million to over 7 million, which shows this level will likely be a strong support for the 50-stock index.

 

Traders bought maximum call contracts of 24700 strike price and open interest in the contract rose by over 2 million to nearly 9 million. Out-of-the-money call options for contracts expiring Tuesday were also in heavy demand across 24400-24750 strike prices, pushing premiums higher by several times. A heavy open interest build-up at 25000 strike price indicates strong resistance for the 50-stock index at that level. Beyond this level, contracts across 25050-25400 strike prices were sold, reinforcing the view that traders do not expect the headline index to rise beyond 25000. 

 

Open interest in call contracts at 25000 strike price rose to 7 million and its premium almost doubled for contracts expiring Jul. 28. In monthly contracts, call options were sold above the 25,500 strike price and purchased under this level. Analysts were more reserved in their expectations than derivative traders. The Nifty 50 sustaining over 24330 level Monday could push it towards 24500–24550 levels, Kumar said. A fall below 24200 level could push the Nifty back into a consolidation range, he said. The Nifty 50 will likely end around 24500 level this month, Jatin Gedia, vice president of technical research at Teji Mandi Investment Technologies said. 

 

Traders took long positions on the derivatives of HDFC Bank. Premiums for at-the-money contract of INR 820 rose 15% and traders also purchased call contracts for strike prices up to INR 850. A rise to INR 850 implies a 4% upside from the stock's current levels. Analysts expect HDFC Bank to report solid growth in net interest income for the June quarter, supported by healthy growth in loans and deposits. The country's largest private sector lender's standalone net profit for the June quarter is projected to rise 8% on year to INR 196.87 billion and its net interest income is expected to go up 9% on year to INR 342.46 billion.

 

Traders heavily sold put contracts and covered their short positions on the derivatives of ICICI Bank. They also bought call contracts across strike prices, indicating a bullish trend. Premiums on out-of-the-money call contracts for INR 1450 and INR 1500 strike prices doubled and tripled, respectively. 

 

Traders sold put contracts on the derivatives of Kotak Mahindra Bank. They covered their short positions and bought call options sitting at cheap premiums. Open interest at call contracts of INR 400 strike price was over 13 million, sharply higher than other contracts, indicating that the stock may face resistance at this level. Friday, the stock ended nearly 4% higher at INR 389.95. Analysts expect the bank will report healthy on-year growth in net profit for the June quarter on the back of robust loan growth, increased treasury income, and lower operational expenses. The private-sector lender is estimated to post a net profit of INR 40.49 billion for the June quarter, up over 23% on year.

 

Axis Bank's options data suggests there could be a sharp rally from current levels. However, heavy open interest build up for multiple contracts at INR 1400-INR 1350 strike prices indicates a large possibility of profit taking. A rise to INR 1,400 would imply gains of over 5% from current levels. Premiums across call contracts of INR 1,350-INR 1,400 increased sharply, while heavy selling of out-of-the-money put contracts led to a sizeable decline across INR 1,300-INR 1,280 strike prices.  

 

--Nifty 50 July closed at 24345.00, up 248.60 points; 10.70-point premium to the spot index

--Nifty 50 August closed at 24425.00, up 234.40 points; 90.70-point premium to the spot index

--Nifty 50 September closed at 24569.90, up 226.50 points; 235.60-point premium to the spot index

 

ICICI Bank, Reliance Industries, Federal Bank, Infosys, Tata Consultancy Services, HDFC Bank, Tech Mahindra, Bharat Heavy Electricals, Jio Financial Services, and Axis Bank were the most actively traded underlying stocks Thursday.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Avishek Dutta

 

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