Ms. Sneha Seth (Derivatives Analyst, Angel Broking):
"We started-off the week on a strong note and extended the move beyond the psychological figure of 12000. The benchmark index clocked a fresh record high of 12103.05 on the same day and concluded the session at the highest point ever. However, this was followed by some consolidation ahead of the RBI Monetary policy. On Thursday, we saw index correcting below 12000 and selling accelerated post the announcement of repo rate cut by 25 bps to 5.75 percent. But to our surprise, we hardly saw any relevant open interest activity despite a sharp fall of 1.5%. Eventually, we saw follow-up selling on Friday towards the 20 EMA (11770) and then sharp recovery brought index above 11850 on the closing basis.
In F&O space, although we saw some profit booking from the record highs, the outstanding positions for both the indices added hardly any relevant positions. Meanwhile, stronger hands (FIIs) continued their selling streak in the index futures segment but at the same time bought index call options. For the coming weekly series, the base has now shifted lower from 11900 to 11800 and on the upper side 12000 call option has maximum open interest concentration. Despite the sharp fall, we could hardly trace any unwinding in ATM and OTM puts; instead, we saw addition of fresh positions with a fall in implied volatility. This indicates writing in puts which is a sign of strength. Considering the above F&O activity, we don't see any sign of caution now. Going ahead, the previous support of 12000-12040 may now act as a hurdle; whereas, 11750-11800 shall act as immediate support zone for the benchmark index."