Bullish Undercurrent: Insights from Options Data

Call OI surging at 19,800/ 20,200/ 20,100/ 20,000/ 20,300/ 19,200/ 20,050 strikes, while 19,800/ 20,100/ 20,200/ 20,300/ 19,700 strikes recorded major Call OI addition

Snapshot

• 19,900CE has highest Call OI
• Maximum Put OI at 19,000PE
• India VIX rises 1.55% to 11.83 level
• OI bases building up at OTM & ITM strikes

The options data on NSE is showing stock-specific trading and occasionally moving based on sector-related cues from the global markets. Since there’s no fall in OI, the market is either in wait and watch mode or holding an undercurrent bullish bias, observe derivatives analysts. The 19,900CE has highest Call OI followed by 19,800/ 20,200/ 20,100/ 20,000/ 20,300/ 19,200/ 20,050 strikes, while 19,800/ 20,100/ 20,200/ 20,300/ 19,700 strikes recorded major Call OI addition.

Coming to the Put side, maximum Put OI is seen at 19,000PE followed by 19,800/ 19,700/ 19,100/ 19,200/ 19,300/ 18,600/19,500/ 19,400/ 19,550 strikes. Further, 19,100/ 19,000/ 19,200/ 19,800/ 19,650/19,500 strikes witnessed reasonable build-up of Put OI. Interestingly, major OI offloading not seen on either side of options chain.

BSE Sensex closed the week ended November 17, 2023, at 65,794.73 points, a net recovery of 809.47 points or 1.24 per cent, from the previous week’s (November 10) closing of 64,985.26 points. During the week, NSE Nifty too moved up by 289.10 points or 1.48 per cent to 19,731.80 points from 19,442.70 points a week ago. India VIX rose 1.55 per cent to 11.83 level.

Stakeholders are keeping their fingers crossed amid ongoing Assembly elections in five States. While keeping their positions intact, speculators are not building up any fresh longs. However, they’re not offloading as well, said market analysts.

After the Assembly poll results in December first week, the market will take its own direction subject to the political influence on next Lok Sabha elections in 2024. Foreign portfolio investors (FPIs) were sellers in the domestic markets since August. FPIs sold Rs83,422 crore since August till November 15, while DIIs extended support to the market by buying stocks worth Rs77,995 crore. DII buying had offset the impact of FII selling. Options data is also supporting this logic as Nifty has been hovering at 19,700 points. Global factors such as US bond yields, crude oil price volatility, FII trading, DII support, Rupee fluctuation in forex market in addition to domestic macroeconomic data will influence trading this week. Derivatives traders are also keen on US existing home sales, initial jobless claims, US manufacturing and services PMI, FOMC meeting minutes, UK manufacturing and services PMI, etc.

In the last one month, global cues impacted the market mostly and it continues to influence this week as well. IT, realty, auto stocks lead the gainers. OI bases hold strong buoyancy and the mid-cap index also reclaimed its record high after two months.

Bank Nifty

NSE’s banking index closed the week at 43,583.95 points, lower by 302.95 points or 0.69 per cent from the previous week’s closing of 43,886.90 points. Weakness likely to continue as Bank Nifty has support at 43,400 level and it may reverse from this level, said technical analyst. The banking index suffered steep fall and hovering at 20-day moving average of 43,400 level.