Most of the global indices are trading in the negative territory. The Nifty is expected to open on a weak note. The index has a strong support placed at around the 4,950-4,970 levels. With positive F&O data continue to prevail, a bounce back from support levels cannot be ruled out,``
Nifty September futures open interest increased to 24.37 million shares from 22.86 million shares last Friday. The current open interest stands highest in last 2 series. Most of the accumulation seems to be on long side as indicated by the FIIs data. FIIs remained net buyers to the tune of Rs 5.39 billion along with an increase in open interest to 0.55 million contracts from 0.51 million contracts. Increased long accumulation suggests positive sentiments prevailing in the street.
Nifty OTM put strikes continued to add open interest. Maximum accumulation was seen in 4,700 strikes wherein open interest increased to 7.53 million shares from 6.40 million shares. Open interest in 4,400 strike rose to 4.51 million shares from 3.52 million shares. Among call options, maximum accumulation was observed in 5,400 strikes wherein open interest increased to 4.12 million shares from 3.31 million shares. Increased accumulation in OTM strikes along with an increase in implied volatility suggests higher probability of large moves in either direction.
Technically, the domestic markets are showing signs of consolidating upwards after a sharp decline a fortnight ago. The headline indices have rallied off a channel bottom support and the market internals have been supportive of the upmove The weekly range advocated for the Nifty between the 5150 / 4575 levels have held as the benchmark trended within these levels. The coming week is likely to witness a range of 5300 on the upside as long as the Nifty stays above the bullish pivot at the 5000 mark. In case of declines, the Nifty is likely to test a level of 4600 as long as the bears keep the Nifty below the 4925 levels. Continue to hold a buy view on the Nifty via the ETF ( Nifty BeES) route as the pullback may have some more steam.
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