Green, Green everywhere! Tata Steel 910 call option provides blockbuster returns!

Update: Indian markets extended their early morning gains and were trading higher nearly by one and half a per cent. Nifty Metal is up by more than 4 per cent with Tata Steel and Hindalco contributing the bulk of the gains to the metal index.   

Tata Steel is up by about 7 per cent and interestingly, the 910 call option has surged more than 140 per cent while open interest change witnessed in 910 call option is staggering over a thousand per cent. Meanwhile, on the put option side, 780 and 770 put option open interest has surged 1,900 and 1,783 per cent, respectively.   

Cues from the global markets: European stock markets were trading in the green, aided by positive global sentiments as the market participants focus on the outlook for growth amid advances in vaccine rollouts.  

Dow Jones Futures was trading above the 32,600 mark and was seen hovering around the day’s high.   

Update: It’s a fabulous Friday for the Indian benchmark indices as Nifty is up by 170 points at the 14,500 mark while Sensex has jumped more than 500 points in early deals on the back of favourable global cues. 

Around 43 out of 50 stocks were trading in the green whereas 5 stocks were in red and 2 stocks were unchanged. HDFC twins and ICICI Bank were the top three contributors to the index as they have collectively contributed 57 points of gains.   

Despite the fact that the sentiment of the secondary market is bullish, the new listing on the bourses was tepid Kalyan Jewellers' debut at a 15 per cent discount to issue price while Suryoday Small Finance Bank too followed the suit.   

On the derivatives' front, most of the advancers were in the auto sector, which has seen maximum long built-up. On the other hand, the pharma sector has witnessed maximum short built-up.   

Nifty was under the pressure on the F&O expiry day and lost 1.54 per cent as sentiments were downbeat from the beginning, owing to subdued global cues and a continuous uptick in Coronavirus cases in India.

During the day, the index tried to recoup losses; however, selling pressure at the higher levels dragged bulls lower, and finally, the index settled at 14,325 level.   

Nifty lost 5 per cent in the March F&O series and it has been one of the worst F&O series post lockdown periods. The price action of the day has formed a sizeable bearish candle, carrying lower high & lower low. It has recorded its lowest closing post the Union Budget 2021. Since January 29 lows, the index rallied 1,835 points in just 13 trading sessions, and from the peak of 15,431, the index has retraced 61.8 per cent of the rally in 26 trading sessions. A slower pace of retracement indicates that the current fall is a healthy one. Having said, the index has breached its crucial support of 50-DMA and it is currently trading 3.5 per cent below the 20-DMA. And more importantly, both the moving averages are trending downwards, which is a bearish signal.  

Going ahead, Thursday session low of 14,264 is critical to watch out for as holding above this support level could result in a pullback rally towards the levels of 14,450-14,500 in the near term. A decisive close below the 14,264 levels could result in an extension of downfall towards the 14,000 levels.  

The 14-period RSI has made a new 14-period low and closed below the 40 levels. The daily MACD is bearish as it's below the signal line.