Informist, Tuesday, Nov 28, 2023

By Akshata Gorde

MUMBAI – Derivative traders shifted to a bullish stance after the Nifty 50 surpassed the crucial level of 19850 points today, but remain watchful of the spot index sustaining above this level. This was a strong directional move that investors were waiting for after the 50-stock index was stuck in a range for a week. 

Traders bought out-of-the-money call options of 19900-20100 strike prices today, but continued to unwind positions at 20200 call strikes, as the 50-stock index is expected to touch newer lifetime highs only if it sustains above 19850 points, said analysts.

"Nifty (50) has finally surpassed the hurdle at 19850 (points) and now we expect the index to inch toward a new high," said Ajit Mishra, a senior vice president of technical research at Religare Broking Ltd.

Further, Viraj Vyas, a technical and derivatives analyst at Ashika Stock Broking Ltd said that if the index sustains above 19900 points, then the index may go up to 20400-20500 points.
 

Today, the Nifty 50 closed 0.5% higher at 19889.70 points after opening marginally higher on the back of gains in shares of Adani Enterprises and Adani Ports and Special Economic Zone. The index closed around 300 points shy of its lifetime high of 20222.45 points. Technical analysts expect the index to find support at 19800 points and see resistance at 20200 points.

"If Nifty moves above the 19889 mark then it’s safe to assume that Christmas has come early to Dalal Street and stock markets across the globe," said Prashanth Tapse, senior vice president of research at Mehta Equities Ltd in a note.

Traders bought call options of 19900 to 20150 strike prices after the gains seen in the second half today. However, call writing was seen at 20200 strike price, with the highest open interest addition of 2.5 mln, as traders were unsure if the index would be able to sustain these gains. 

The premium at 20200 call strike fell by 12.7% to 2.4 rupees, while that of the 20000 strike price rose by 96% to 35.30 rupees today. 

Heavy put writing was seen across all strikes with the highest open interest addition of 7.7 mln contracts at the 19800 strike price. The premium at 19800 put strike fell by 75% to 15.90 rupees and had the highest open interest of 15.4 mln contracts. 

--Nifty 50 Nov closed at 19953, up 126.05 points; 63.30-point premium to spot index

--Nifty 50 Dec closed at 20074, up 136.05 points; 184.30-point premium to spot index

--Nifty 50 Jan closed at 20188, up 134 points; 298.30-point premium to spot index

Today, HDFC Bank, Adani Ports and Special Economic Zone, ICICI Bank, Adani Enterprises, Reliance Industries, Tata Motors, State Bank of India, and Bajaj Finance were among the most-actively traded underlying stocks.  End

Edited by Vidhi Verma

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