Nifty: Nifty could immediately test 11,553, 11,488

Mumbai: The Nifty could immediately trade in a 2.2% range eitherside from 11700 with a bias on the downside, weekly options data show. Brokers believe that the market could be a “sell on rise” one, tracking global markets spooked by a second wave of Covid infections.

The range for the market based on the combined value of the 11,700 call and put expiring on October 22 is 11,434-11,966. The bias, going by the open interest put call ratio of 0.75, is on the downside.

Simply put, it means traders have sold more call options than puts on the Nifty, expecting the market to decline further and gobbling up the premiums received by selling calls to the option buyers.

Rohit Srivastava, founder, IndiaCharts, pegs important supports at 11,553 and 11,488. If these are not held, the market could tank more next week, said Rajesh Palviya, derivatives head at Axis Securities.

Apart from negative global cues, fanned by fresh Covid fear, markets were spooked by unconfirmed rumours of a broker default and the illness of an important businessperson.

Active Nifty and Bank Nifty futures witnessed a modest rise in open interest as the market fell, implying creation of fresh shorts.

Source link

Leave a Comment

© 2020 Daily Dose of Market and Beyond News