F&O cues: Nifty futures signal trade in 19,300-20,200 range during August series

On the technical side, Nifty formed a bullish candle and has been making higher highs – higher lows from the last four series with addition in open interest by 33.84% in the series with a rise in price by 3.63% on an expiry-to-expiry basis.

Rollover of Nifty stood at 84%, which is higher than its quarterly average of 77%. Continuous longs have been added at support zones which has acted as a good base which may keep the market afloat, a technical and derivatives research report from brokerage firm Motilal Oswal Financial Services said.

Meanwhile, as per the analysis, since the beginning of August series, Option data is scattered at various far strikes in monthly series. On a weekly front, Maximum Call open interest (OI) is at 19,800 then 19,700 strike while Maximum Put OI is at 19,600 then 19,500 strike. Call writing is seen at 19,700 then 19,600 strike while Put writing is seen at 19,600 then 19,500 strike.

According to Motilal Oswal analysis, option data suggests a broader trading range in between 19,300 to 20,200 zones while an immediate trading range in between 19,500 to 19,850 zones.

Also Read: Stocks to buy this week: Experts suggest these six technical picks; do you own any?

On July 28, the first day of the August series, Nifty closed near 19,650 zones and At The Money Straddle (August Monthly 19,650 Call and 19,650 Put) is trading at net premium of around 485 points, giving a broader range of 19,165 to 20,135 levels. 

“Considering overall derivatives activity, we are expecting positive to range bound moves for Nifty as we head into the August series. Now, it has to hold above 19,500 zones to witness an up move towards 19,991 and 20,200 zones while on the downside major support shifts at 19,300 zones,” the brokerage report said.

Buying interest was seen in Media, Energy, Pharma, Realty, PSU Banks, Auto and Metal sector while some profit booking was seen in FMCG and IT sector.

Foreign Institutional Investors (FII) continued their buying streak in July and cumulatively bought equities worth ₹16,234 crore so far during the month. On the flip side, Domestic Institutional Investors (DII) sold shares to the tune of ₹5,186 crore in July till date. 

“The FIIs ‘Long Short Ratio’ in index futures remained improved and ranged from 53.67% to 73% in the July series to close at its lower band. The ratio improved from 7.8% to 73% in a span of 100 days and the index soared to life high levels,” the report said.

Meanwhile, bull took the Bank Nifty index to its all-time high of 46,369 zone in the July series. Short covering was seen as open interest decreased by 14.5% and price was up by 3.1% on an expiry-to-expiry basis. 

“Rollover in Bank Nifty stood at 77.4%, which is lower than its quarterly average of 78.3% but overall buying interest is going to keep the positive trigger intact. Bank Nifty needs to hold 44,444 zones to extend this move towards its recent lifetime high of 46,369 – 46,500 zones,” the report said.

Among stocks, long rollovers were witnessed in BHEL, Escorts, Coromandel, Auropharma, ZEEL, ACC, GAIL India, REC Ltd, Hindustan Copper, Birlasoft, Tata Motors, Cummins India, NMDC, Ambuja Cement, Mcdowell Holdings and Ashok Leyland, while short rollover in UPL, Bandhan Bank, PI Industries, Dixon Technologies, Eicher Motors, SRF, IEX and M&M Financial Services, it added.

Catch Live Market Updates here

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

Updated: 01 Aug 2023, 06:01 AM IST