The Nifty 50 (18,308) underperformed the Nifty Bank (42,437) over the past week as the former was down by 0.2 per cent compared with the latter’s gain of 0.7 per cent. However, from a broader perspective, both the indices seem to lack momentum on both sides, as bulls and bears struggle to establish control. Now let’s see what derivatives data of these indices have to say.
Nifty 50: The cumulative Open Interest (OI) of Nifty futures was cut to 137.1 lakh contracts on Friday compared to 143.7 lakh contracts by the end of previous week. In this period, the price of Nifty November futures moderated to 18,345 from 18,424, thus hinting at long unwinding after seeing a build-up in the preceding two weeks. The Put Call Ratio (PCR) of Nifty’s nearest weekly expiry options stand at 0.73, giving it a bearish inclination. Therefore, we might witness some softening in Nifty futures this week.
Nifty Bank: The cumulative OI of Nifty Bank futures did not change much as it stood at 30.6 lakh contracts on Friday compared with 30.9 lakh contracts a week ago. The November futures rallied to 42,504 from 42,293. The PCR of weekly options at 0.87 shows more call writing than puts, giving bearish bias. The Nifty Bank futures might as well see a decline in the coming week.