US-Iran war: Extending yesterday’s pullback rally on Tuesday morning session, the key benchmark indices of the opened northward in the Opening Bell. The index opened at 23,493 and touched an intraday high of 23,566 within an hour of the market opening. The BSE Sensex opened higher at 75,826 and climbed to an intraday high of 75,977, recording an intraday gain of more than 0.60%.
According to stock market experts, investors need to take Calls and Put Writes in bulk at 22,000, indicating that the Nifty 50 index has strong support at 22,000, which is expected to remain sacrosanct. Following the outbreak of the , global equity markets, including Dalal Street, have been falling continuously. So, the war trigger is about to be priced in, as we saw during the Russia-Ukraine war in 2022. Experts maintained that the has further reduced and is now close to 20, reflecting a reduction in risk perception.
Stock market today: What Calls, Put Write positions signal?
Expecting the Nifty 50 index to sustain above 22,000 levels even if the current pullback turns out to be a dead-cat bounce, Rakesh Bansal, Co-founder & Co-partner of Rakesh Bansal Ventures, said, “Investors have taken calls in bulk at 22,000, which signals the 50-stock index may not break this crucial support in the current fall.”
Pointing towards the Put Write signal, Amit Goel, Chief Global Strategist at PACE 360, said, “Investors have taken a bulk Put Write position at 22,000 levels of the Nifty 50 index. This is expecgted to to provide support to the 50-stock index around this Put Write level.”
Amit Goel of PACE 360 said that Put Writers are not retail investors. Generally, the Put Writers belong to HNI, institutions (DII and FII), and some section of ace or smart investors.
What does India VIX signal today?
Sumeet Bagadia, Executive Director at Choice Broking, said the India VIX index declined by over 4.50% on Monday, and the volatility index has corrected by over 6% during Tuesday’s deals. The India VIX is oscillating around 20 today, signalling a reduction in risk perception among market participants.
“The India VIX today indicates easing market volatility and a reduction in risk perception among market participants,” said Bagadia.
Nifty 50 outlook for the short term
After the end of the Monday session, Bagadia said that call writing was observed at the 23,500 strike, followed by the 23,700 strike. On the put side, notable writing was seen at the 23,200 and 23,000 strike levels.
“This means 23,000 is expected to remain a crucial support for the Nifty 50 index in the near term, and bulls’ conviction can get strength once the key benchmark index breaks above 23,700 on a closing basis,” said Sumeet Bagadia of Choice Broking.
Has the Indian stock market discounted the US-Iran war?
On whether the market has discounted the US-Iran war, Amit Goel of PACE 360 said, “Every trigger has a limit, and the US-Iran war is not an exception. We saw a spike in crude oil prices after the outbreak of the US-Iran war, but after more than two weeks, prices have been oscillating around $95/barrel over the last two sessions. As the market was correcting due to the rise in oil prices, which renewed the inflation fear, global equities are trying to come out of the bears’ grip.”
Amit Goel of PACE 360 said that tension around the Strait of Hormuz has eased as oil importers have found an alternative by placing fresh orders with Russia, Venezuela, and the US, depending on their geopolitical locations.
“So, the oil crisis seems priced in and so does the equity market correction, and I am expecting the 22,500 to 22,000 to be a strong cushion for the Nifty 50 index, if yesterday’s bounce back turns out to be a dead-cat bounce,” the PACE 360 expert added.
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