8,300 will be a resistance for the Nifty in the near term, according to derivative data.
Open interest in the October Nifty futures increased by 8 lakh shares, while premiums also expanded to 21.3 points from 7.5 points earlier, suggesting massive short covering and fresh addition of long positions.
On the options side, the 8,200 strike put has added 8.1 lakh shares in open interest, while open interest in the 8,300 call has increased by 5.3 lakh shares. The 8,300 strike call has now the maximum open interest among calls. This show 8,200 will act as an immediate support for Nifty, but 8,300 will be a major resistance in the near term.
Overall, puts have added 22 lakh shares to open interest while calls have added 14.6 lakh shares to open interest pushing the put-call-ratio (PCR) to 1.02 from 1 earlier. A PCR of more than 1 indicates bullish sentiment as more puts get written compared to calls.
The India VIX or the volatility index fell another 5.21 per cent on Friday to end at 16.275. This shows growing confidence about long positions in the market.
Among individual stocks, Mindtree saw 29 per cent increase in open interest along with 1.4 per cent gain in stock price; this clearly indicates addition of bullish bets after its strong second quarter earnings.
Biocon, Petronet LNG and Ambuja Cements also witnessed addition of bullish bets. On the other hand, SAIL and IOB saw addition of bearish bets.