Investors’ mood seemed bullish ahead of Diwali as both Nifty 50 (17,576) and Nifty Bank (40,784) posted gains last week. Interestingly, Nifty 50 gained in all sessions of last week. Nevertheless, Nifty Bank outperformed Nifty 50 as the former gained 3.8 per cent against the latter’s 2.3 per cent appreciation.

The derivatives data of both the indices showed similar sentiment as there was long build-up in both.

Nifty 50: The cumulative Open Interest (OI) of Nifty 50 futures on the NSE increased to 159 lakh contracts on Friday versus 146.7 lakh contracts by the end of the preceding week. This was along with Nifty futures (nearest expiry) going up to 17,564 from 17,196 during the corresponding period. Option chain of October monthly expiry shows that 17,500 and 18,000 are the key levels and given that it is trading near 17,500, we might see the index moving up to 18,000 in the near term. So, overall, there is a bullish bias and traders can go for long trades at this juncture.

Nifty Bank: Nifty Bank futures too saw long build-up as the cumulative OI on the NSE went up to 23.5 lakh contracts on Friday compared to 21.3 lakh contracts a week ago. The price of October futures rallied to 40,788 from 39,395 in the corresponding period. Option chain indicates that there is less room for rally in Nifty Bank this week and so, it could underperform Nifty 50.

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