Summary:
1. In my pre-market post on Friday here I made a mistake of comparing Sep data at end of first trading day of series with Oct data on expiry day. So today would the right time to compare both.
2. I still find the Sep series had way better support because of 90L 5400PEs. But action on last Friday was a pretty good step in right direction. 20L 6100PEs & almost 20L 6000PEs were written. So current support at 6000 with 63L puts vs 32L calls.
3. After the mayhem in Sep series, Call writers are still wary of writing calls. Its very clear from Friday's action - call writers don't want to write 6000/6100CEs but they are willing to write 6300CEs. So 6300 is seen as resistance "For Now"
4. Some 6200PEs were also written on Friday. Either its a fake move like we saw 6100PEs written few days before expiry or a visit to 6200+ is imminent. Only time will tell.
5. PCR has now at 1.36 - nowhere near the levels we saw in SEP.
Nifty Futures:
2.74Cr - OI down 1.3% (3.6L shares cut)
Banknifty Futures:
17.8L - OI up 1.7% (0.3L added to OI) -- This OI is stil about 38% lower than what we saw when the breakout happened around 11400
Infact I did some study of OI over the weeked for 4 banks that make up 70% of Banknifty - SBIN, ICICIBANK, HDFCBANK, AXISBANK
All of them have very similar OI pattern! All of them have OI about 35-40% down from their their peak in SEP. Also OCT series starts off with much lower OI than what we had in beginning of SEP series. My conclusion here is lot of shorts are covered in Banknifty/Top 4 banks and now it remains to be seen if longs get added in a big way to take the index further up.
The first part of the rally is typically easy because short covering can easily give that first 5-10%. Its only whether short covering leads to longs addition that makes a rally sustainable and stronger for further extension.
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