Informist, Tuesday, Dec 5, 2023

By Padmini Dhruvaraj

MUMBAI – Investors continued to add long bets across out-of-the-money strike prices of the Nifty 50's call options expiring on Thursday as the spot index recorded a fresh lifetime high today. The benchmark index opened higher today, extending the bull run for the sixth straight session, and hit an all-time high of 20864.05 points. Eventually, the 50-stock index closed 0.8% higher at 20855.10 points. 

"Indian equity indices, Nifty and Sensex, hit fresh record highs for a second straight session despite weak cues from global equity markets as positive sentiments persisted in the domestic market on state election wins for BJP (Bharatiya Janata Party), the current ruling party, in three key states," said Avdhut Bagkar, technical and derivatives analyst at StoxBox.

Premiums of call options between 20850 and 21200 rose, indicating that the Nifty 50 will likely extend its bull run. "Technically, the short-term texture of the market is still into the long side. A breakout continuation formation on weekly charts and uptrend continuation formation on intraday charts indicating further uptrend from the current levels," said Shrikant Chouhan, head of equity research at Kotak Securities Ltd.

On similar lines, Ajit Mishra, senior vice-president of technical research at Religare Broking, said: "The rotational buying across heavyweights is pushing the Nifty to a newer high despite the overbought reading and it is now heading towards a new milestone of the 21,000 mark."

The 21000 strike price of the call options had the highest open interest addition today, with 3.59 mln new positions, and its premiums rising 114% to 38.10 rupees. Meanwhile, some aggressive call selling was seen at 21300, 21400, and 21500 strike prices. The 21500 strike had the second-highest net change in open interest with 3.10 mln new contracts. 

On the put side, premiums across strike prices fell, mirroring the bullish trend in the market. The 20800 strike had the highest open interest addition today with 6.95 mln new positions. The premium on the contract, however, fell 67.25% to 51.20 rupees. 

Going forward, analysts find 20700 as a support for the Nifty 50 and resistance as 20950-21000. 

Meanwhile, the December futures contract of the Nifty 50 closed at a premium of 97.9 points to the spot index today. Open interest in the contract rose 3.2% to 11.23 mln, according to provisional data.

--Nifty 50 Dec closed at 20953.00, up 154.10 points; 97.90-point premium to spot index

--Nifty 50 Jan closed at 21069.15, up 153.70 points; 214.05-point premium to spot index

--Nifty 50 Feb closed at 21180.00, up 161.55 points; 324.90-point premium to spot index

Adani Ports and Special Economic Zone, Adani Enterprises, Maruti Suzuki, ICICI Bank, Reliance Industries, Mahindra & Mahindra, State Bank of India, ACC, and Ambuja Cements were among the more actively traded underlying stocks.  End

Edited by Manisha Baxla

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