The Nifty 50 (17,315) gained 1.3 per cent last week after posting loss in the three preceding week, putting an end to the decline, at least temporarily. Similarly, the Nifty Bank (39,178) appreciated by 1.4 per cent to end a two-week losing streak. That said, the derivatives data of the Nifty 50 shows that the index may be beginning to try to form a bottom. On a weekly basis, there wasn’t much activity in Nifty Bank derivatives.
Nifty 50: The cumulative Open Interest (OI) of Nifty futures on the NSE went up at the beginning of last week. That is, on Monday, it went up to 138 lakh contracts from 130 lakh contracts on previous Friday along with price decline, indicating sellers’ attempt to take control. But then, the bears were not able to drag the index further and during the following sessions, the OI dropped, hinting that they gave up. Considering the option chain, 17,000-strike put, and 18,000-strike call have the highest open interest in the nearest weekly and the monthly contracts. So, as it stands, the participants are expecting the index to stay within the 17,000-18,000 range through October expiry.
Nifty Bank: Unlike the Nifty 50, although there was price movement during the week, the movement in the cumulative OI of Nifty Bank futures on the NSE was relatively quiet. Last week’s rally did not see the creation of OI and it did not drop too much as well. So, there is no clear indication. That said, the option chain, like Nifty 50, is suggesting a flat movement.