F&O Manual |Bull run persists as Nifty shows aggressive put writing at 20000 strike

The market opened at fresh record highs due to upbeat cues from Asian markets, as investors brushed off jitters stemming from the slightly higher-than-expected US consumer price index for August. This helped boost sentiment for domestic equities. As the day progressed, the Sensex and Nifty 50 retraced from their early highs. Nevertheless, bulls continue to support the market, keeping the Nifty firm above the 20,000 mark.

At 12 PM, the Sensex was up 17.26 points or 0.03 percent at 67,484.25, and the Nifty was up 18.30 points or 0.09 percent at 20,088.30. About 2217 shares advanced, 801 shares declined, and 94 shares unchanged.

Bars reflect changes in open interest (OI) during the day. The red bars show call option OI and the green put option OI

Options data suggests support for the day at 19950-20000 levels with strong resistance at 20150. As per analysts, the future open interest (OI) indicates buildup of fresh long positions for the ninth consecutive day. The Foreign Portfolio Investors (FPIs) have been aggressively building long positions in the Index futures with the Long-Short Ratio moving from 51.77 percent on 4th September to approximately 65 percent on 14th September.

As per Samco Securities, “Short covering coupled with aggressive put writing is observed at 20,000 Strike which led to a strong intraday move in Nifty today. Nifty moved in a higher high formation on the daily chart in the previous 8 trading sessions. The maximum call open interest for Nifty is placed at 20,100 Strike. Nifty is likely to move higher once call writers exit from the 20,100 Strike ahead of the weekly expiry today.”Follow our live blog for all market action
Among individual stocks, BalramChin, NMDC and Concor saw a bullish setup, while Colpal, AsianPaint and ONGC saw a bearish build-up.

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