Put Options Signal India’s Nifty Index Forming Support at 10,000
India equity option traders are confident that the 10,000 level can act as a key support for the NSE Nifty 50 Index.
(Bloomberg) -- India equity option traders are confident that the 10,000 level can act as a key support for the NSE Nifty 50 Index.
Put options with a 10,000 strike price now hold the highest outstanding bets among the index option contracts, compared with options at a 9,000 level holding that milestone until Friday, according to data from NSE.
The Nifty Index this month rose past the 10,000 level for the first time since March. The measure has gained more than 35% from a low in March, tracking a rally in global equities, even as the South Asian nation faces its first economic contraction in four decades in the wake of the coronavirus pandemic.
“The base seems to have shifted higher from 9,700 to 10,000,” Sameet Chavan, an analyst at Angel Broking Ltd., wrote in a note Monday. “The set-up overall looks good and ideally we should make a move beyond our recent highs of 10,350-10,400 to test higher levels of 10,600-10,800 in the forthcoming week.”
Still, the upcoming expiry of monthly derivative contracts on Thursday and concerns about a second wave of coronavirus infections in some parts of the world, along with rising tensions between the U.S. and China, may keep India’s stock market volatile this week.
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