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The Nifty 50 (17,186) lost 0.7 per cent last week, whereas the Nifty Bank (39,306) posted a marginal gain of 0.3 per cent. While the Nifty 50 seemed to form a base, the latest derivatives data hint at fresh shorts entering over the last week. That said, the Nifty Bank appears flat as there has not been much change in positioning, at least with respect to futures.
Nifty 50: The cumulative Open Interest (OI) of Nifty 50 futures on the NSE shot up to nearly 147 lakh contracts on Friday compared to 135 lakh contracts a week ago. In the corresponding period, Nifty futures declined from 17,329 to 17,196. A price drop with increasing OI indicates fresh short build-up. The Put Call Ratio (PCR) of the nearest weekly and monthly options are at 0.67 and 1.1 respectively, suggesting a downtrend this week and a recovery towards the end of the October monthly expiry. According to the monthly options chain, the key support and resistance levels are at 17,000 and 17,500 for Nifty 50.
Nifty Bank: Nifty Bank was relatively less volatile last week. As we expected, the index ended the week almost flat. This lack of trend is likely to be extended this week too, as there has not been any clear indication of long or short build-ups. The cumulative OI of Nifty Bank futures was at 21.3 lakh contracts on Friday as against 22.6 lakh contracts a week ago. Key support and resistance are at 39,000 and 40,000 respectively, according to options chain.
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