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Yes, there was some recovery from the lows of the day, but more than the recovery, the fact that the index is just not able to sustain at higher will be the bigger takeaway for the bulls going into the weekly options expiry session on Thursday.
The Nifty continues to be stuck in the range of 24,900 to 25,200. Even on Wednesday, it managed to defend 24,900 on the downside but could not sustain above 25,000. For the last three trading sessions, the Nifty is making lower lows on the charts, while the highs are oscillating between 25,000 and 25,200.
We had also mentioned about the Nifty Bank on Tuesday evening that it could emerge as an outperformer in comparison to the Nifty but that too could not sustain above 51,900 on its weekly options expiry day, given the sour sentiment on the street. However, there is no significant movement there as the index has still closed above the mark of 51,800.
What might just end up saving the day on Thursday would be a positive global handover and Reliance Industries, which announced the record date for its 1:1 bonus issue of shares after getting shareholder approval by a majority.
Thursday’s trading session will see stocks like Bajaj Auto, L&T Technology Services and Mphasis react to results.
On Thursday, four Nifty companies – Infosys, Wipro, Axis Bank, Nestle India will be reporting their results, along with broader market names like LTIMindtree, Havells, CEAT, Polycab, Tata Chemicals will also be reporting results.
Foreign institutions continued to remain net sellers in the cash market, selling more than what they did on Tuesday, while domestic investors remained net buyers but in a lower quantum.
Rajesh Bhosale of Angel One said that the Nifty remains in consolidation mode but a break below 24,900 could open the doors for further weakness towards levels of 24,700. On the upside, there is a hurdle at 25,100, followed by 25,250 and only a move above that can trigger some bullish momentum. Until then, he advises traders to avoid aggressive bets.
Kotak Securities’ Shrikant Chouhan believes that the Nifty closing below its 50-Day Moving Average is largely negative but a fresh round of selling will only come about on a break below 24,900 on the downside. On the upside, 25,078 isa key level for the index for it to retest levels of 25,200 – 25,260.
On the lower side, the Nifty will find support at 24,900 levels and a dip towards those levels can be used as a buying opportunity, said Aditya Agarwal of Sanctum Wealth. Some beaten down largecap stocks are showing first signs of reversal and that can help move the Nifty back to 25,140 – 25,260 levels.
The Nifty Bank made an attempt to surpass 52,000 on the upside but failed to do so. However, the momentum if evenly balanced currently with the index looking for support from a rising trendline on the daily chart, said Om Mehra of SAMCO Securities. He expects the uptrend to remain intact as long as 51,200 on the downside is held but a close above 52,050 is essential for further upside.
Hrishikesh Yedve of Asit C Mehta Investment Interrmediates said that the Nifty Bank has formed a shooting star candle on the daily chart and is likely to face resistance at 52,030 in the near-term. If that happens, it could re-test levels of 52,500 – 52,800 on the upside. On the downside, 51,000 is a strong support and he advises a buy-on-dips approach as long as that level is protected.
What Are The F&O Cues Indicating?
Nifty 50’s October futures added 0.8% or 1.2 lakh shares in Open Interest on Wednesday. They are now trading at a premium of 77.5 points from 61 points earlier. On the other hand, Nifty Bank’s October futures shed 0.6% or 18,315 shares in Open Interest on Wednesday. Nifty 50’s Put-Call Ratio is now at 0.74 from 0.77 earlier.
Bandhan Bank, Chambal Fertilisers, GNFC, Granules India, Hindustan Copper, IDFC First Bank, IEX, L&T Finance, Manappuram Finance, PNB, NALCO, RBL Bank, SAIL and Tata Chemicals remain in the F&O ban list.
Nifty 50 on the Call side for October 17 expiry:
For Thursday’s weekly options expiry, the Nifty 50 Call strikes between 25,000 and 25,200 have seen addition in Open Interest.
| Strike | OI Change | Premium |
| 25,000 | 33.2 Lakh Added | 60.6 |
| 25,100 | 20.7 Lakh Added | 26.1 |
| 25,050 | 17.2 Lakh Added | 40 |
| 25,200 | 14.3 Lakh Added | 10.85 |
Nifty 50 on the Put side for October 17 expiry:
On the Put side, the Nifty 50 strikes between 24,800 and 24,950 have seen Open Interest addition for this Thursday’s weekly expiry, while the 25,100 strike has seen Open Interest shedding.
| Strike | OI Change | Premium |
| 24,800 | 26.6 Lakh Added | 13.7 |
| 24,900 | 12 Lakh Added | 33.6 |
| 24,950 | 11.9 Lakh Added | 50.45 |
| 25,100 | 9.3 Lakh Shed | 135 |
Fresh long positions were seen in these stocks on Wednesday, meaning an increase in both price and Open Interest:
| Stock | Price Change | OI Change |
| HDFC AMC | 5.91% | 10.40% |
| IndiaMART | 0.14% | 5.64% |
| Godrej Properties | 2.50% | 4.83% |
| Max Financial | 0.50% | 4.03% |
| Deepak Nitrite | 1.83% | 3.84% |
Fresh short positions were seen in these stocks on Wednesday, meaning an increase in Open Interest but a decline in price:
| Stock | Price Change | OI Change |
| ICICI Lombard | -1.93% | 10.89% |
| Coforge | -3.30% | 10.85% |
| Power Grid | -0.83% | 9.28% |
| Axis Bank | -0.41% | 6.81% |
| Trent | -3.92% | 5.26% |
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