After trading in a narrow range throughout the day, the Nifty ended 23.8 points lower on Wednesday. However, it managed to hold the key 8,100 level on a closing basis. But derivative data suggests that Nifty may not hold the 8,100 level on Thursday.
Open interest (outstanding position) in the 8,100 strike Nifty put which was at 45.8 lakh shares fell to 38.2 lakh shares and has shifted to puts of lower strike such as 7,900 and 8,000, which indicates that traders expect 8,100 to be taken out in the near term.
Similarly calls of 8,200 and 8,300 strike continued to attract further open interest, making 8,200 a strong resistance for the near term. Overall, puts shed 8.2 lakh shares in open interest while calls added 5.3 lakh shares pushing the put-call-ratio (PCR) lower to 1 from 1.02 earlier. A PCR of more than 1 reflects bullish sentiment for the market.
On the other hand, open interest in the Nifty October futures increased by 1 lakh shares and the premium in the future increased to 13.5 points compared to 7.1 points earlier; clearly, some long positions have been added to the October Nifty future creating hopes for the bulls.
The India VIX or the volatility index fell 1.64 per cent to end at 17.72.
Among individual stocks Zee Entertainment saw addition of short positions; open interest in the counter increased by 33 per cent along with 3.7 per cent fall in its price. Stocks like India Cements, SKS Microfinance and Petronet LNG saw addition of bullish bets.