F&OTracker Mar­ket may Move in a Range Till May-end

The Economic Times - - Markets & Finance -

Traders have been mostly un­wind­ing their po­si­tions in op­tions seg­ment and these are mainly do­mes­tic par­tic­i­pants who have been bet­ting on big moves post elec­tion ver­dict in an­tic­i­pa­tion of favourable out­come. There has been sig­nif­i­cant ac­cu­mu­la­tion of op­tions since be­gin­ning of the May se­ries and that too mainly in call op­tions and, hence, PCR-OI has been at low lev­els of 0.77.

Most of the op­tions buy­ers are stuck in strikes rang­ing from 7500 to 8000. And we be­lieve that in ini­tial part of the new se­ries, PCR-OI would again bounce back above 1 lev­els as put writ­ers have again be­come ac­tive, which is ev­i­dent from fall­ing im­plied vo­latil­ity and rise in put ac­tiv­i­ties.

Till the end of the May se­ries, we be­lieve mar­ket may move in a broader range of 7150 on the lower side and 7450 on the higher side. Mar­ket would not see lot of sup­port com­ing from do­mes­tic par­tic­i­pants who have been on the side­lines in this en­tire run or ei­ther been sell­ing into eq­uity. Any sig­nif­i­cant dip is un­likely and, for this se­ries, upside would meet with some profit book­ing. Par­tic­i­pants should not make mis­take of con­sid­er­ing this profit book­ing as dis­tri­bu­tion.

Though FIIs have been sell­ing in the cash mar­ket since the last few days, we be­lieve it’s more of profit book­ing in ar­bi­trage po­si­tions rather than sell­ing of port­fo­lio. They have been go­ing long in in­dex fu­tures, but the quan­tum of buy­ing is not very sig­nif­i­cant to lead to fresh break­outs in mar­ket. For re­main­ing part of this se­ries, the mar­ket would be in a range and one should adopt stock spe­cific ap­proach.

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