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market was seen consolidating on Wednesday tracking muted global cues.
The Nifty index bucked its ongoing trend of forming consecutive lower lows by closing higher at 19,047 on Tuesday.
The Nifty50 index managed to reclaim 19000 levels on Tuesday amid short covering of existing short positions in the Index futures, suggest experts.
The Put-Call Ratio (PCR) has also improved from 0.63 a day earlier to 1.27 on Tuesday. Put-call ratio (PCR) is an indicator commonly used to determine the mood of the options market.
A PCR ratio below 1 suggests that traders are buying more Call options than Put options.
It signals that most market participants are betting on a likely bullish trend going forward. Also Read https://economictimes.indiatimes.com/definition/put-call-ratio
“The Future Open Interest (OI) indicated covering of existing short positions in Index futures, which led to a strong up move on Tuesday,” Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities, said.
“The Put-Call Ratio (PCR) improved from 0.63 a day earlier to 1.27 today, as put writers were dominant right from the word go on the first day of the new expiry series” he added.
The maximum call open interest strike of 19,000 saw call writers exiting and put writers strengthening their positions, which is a bullish sign.
The Nifty50 broke past the previous day’s high of 19,042 but failed to successfully sustain above this level.
The level of 19,000 is expected to act as immediate support for Nifty.
“Short covering was visible in Bank Nifty with the Index closing at 42,782, up 502 points. Call writers exited positions at the key strike price of 42,500, leading to a sharp rally on the upside,” highlights Ramani.
“The bounce is likely to continue
