Ms.Sneha Seth (Derivative Analyst, Angel Broking): “The benchmark index (Nifty) finally hits 9700 as mentioned in our recent articles; however, we witnessed some profit booking thereafter as traders preferred exiting their positions ahead of RBI Monetary Policy outcome. In Index Futures, both Nifty as well as BankNifty open interest decreased 1.80% and 7.13% respectively, suggesting long unwinding. Today, the overall IT pack supported the market, wherein HCLTECH and TCS added fresh long positions. While, other heavy weight IT counters like INFY, TECHM and WIPRO rallied mainly due to short covering.
As far as Nifty options activity is concerned, 9700 call option most active and it also added good amount of open interest in today’s session. While, in put option, some build-up was seen in 9500 strike followed by unwinding in 9400 put option. In BankNifty options, we could hardly trace any relevant build-up in call option, but, huge amount of unwinding was seen in 23500 call option. On the flip side, 23500 and 23000 put options added huge positions and we beleive these are longs formed by retail participants.
Despite an important event lined up tomorrow, FIIs activity remained subdued in F&O segment. However, long positions formed in index futures in last couple of days are still intact and we can hardly see any signs of profit booking yet, which is a positive sign for Bulls. Thus, unless we don’t see any consequential profit booking or short formation, we would suggest traders to focus on individual stocks with a positive bias in order to fetch higher returns.”