Bulls and bears spar intensely at 13,900, may end Dec at 13,767-14,033 level

MUMBAI: An intense contest was on between bulls and bears intraday Wednesday, with one trying to push then Nifty above 13900 and the other to pull it below 13800. The Nifty was perched at 13905 at the time of writing.

The market range is 13767-14033, with the scale evenly balanced as of now, options data show.

Sellers have written or sold more puts on Nifty than calls, though that gap has been narrowing. Traders sell more puts when they are confident the market wouldn’t fall below the level sold minus premium received from the put buyers.

Call sellers, on the other hand, expect the market wouldn’t rise above the level sold plus premium received from the call buyers.

So, when there are more puts sold than calls sold cumulatively , the set up is bullish. But when the gap between the two narrows, it implies supply at upper band , or profit booking.

The market has been supported by heavy FII/ FPI buying in cash as well as on index futures (Nifty and Bank Nifty).

For eg, in the fiscal year to date , net FII investment in cash is at Rs 2.14 lakh crore. In index futures cumulative net longs stood at 60158 contracts.

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