Mumbai: Traders raised bearish bets by selling more weekly Nifty call options, with the market failing to hold above the key technical level of 11,561.5. The index could immediately test the supports of 11,330 and 11,260. A breach of these levels could take the Nifty to 11,185.15.
The 128.85-point correction in the Nifty from the day’s high to 11,440.05 was marked by aggressive call writing on September 17 expiry Nifty options. The negative bias is underscored by the open interest put call ratio falling to 0.88 Monday from 1.10 Friday.
Huge call writing was witnessed at 11,550 and 11,600 levels, making these levels strong resistances for the weekly expiry. Traders write more calls when they expect the market to remain below the strikes sold plus premiums received from the buyers.
The 11,561.5 level is the 61.8% Fibonacci retracement of the recent correction from 11,794.25 on August 31 to the low of 11,185.15 on September 9.
The Nifty Bank continues to remain the weak link, with weekly PCR at a low 0.58 and September 24 expiry PCR at 0.83. Fresh shorts were created in September Bank Nifty futures contracts.
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September 15, 2020 at 08:30AM
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Put, call data shows Nifty could correct to 11,330-11,260 - Economic Times
"correct" - Google News
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