What do option data say about IndusInd Bank?

The stock of IndusInd Bank Limited has marked a high of Rs 983 as of January 15, 2021, and thereafter, witnessed a correction. During this correction, it has slipped below the upward sloping trendline support. The correction was nearly 19.73 per cent from the higher levels. However, the correction is halted near the 100-day EMA level. On Friday, the stock has formed a Morning Doji star candlestick pattern and initiated its northward journey.   

On Monday, the stock opened with an upside gap, and then, there was no looking back for the bulls. As the day progressed, bulls tightened their grip and settled with a robust gain of nearly 15 per cent. With this substantial gain, the derivatives data is also suggesting a long build-up in the stock. On Monday, February series stock future had 72,01,800 addition of open interest, which is 42.40 per cent addition in the open interest. It indicates that there is a long build-up in the market. February month’s current open interest is 2,41,86,600.  

For February expiry, the total call open interest is 57,01,500 while the put open interest is 54,58,500. Hence, the open interest wise put-call ratio (PCR) is at 0.96 for February expiry.   

For February series, the highest call open interest is at 1,000 strikes with 10,29,600 OI. On the put side, the highest put open interest is at 900 strikes with 12,29,400 OI.  

Today, the highest addition in the open interest was seen at 1,100 calls of February expiry with 1,90,800 OI while on the put side, 900 puts have seen the highest addition in the open interest with 2,90,700 OI. The current derivative data suggest that Max Pain is at 900 and modified Max pain is at 923 for the monthly expiry.    

Going ahead, the level of Rs 1,000 will act as a major resistance for the stock as calls of 1,000 strikes of February expiry has seen the highest open interest and today also, there is a significant addition of open interest in the same strike. On the downside, the level of Rs 900 will act as crucial support for the stock.