Technical and derivative: Markets see wild swings during the week; Nifty, Bank Nifty end the week with gains

Technical

The benchmark Nifty closed with a gain weekly at the end of a volatile week. During the week Nifty has negated the bearish island pattern which was formed last week.  The daily RSI (14) has formed a lower top as it followed the lower tops in the price pattern confirming the absence of any divergence. On the lower end support is pegged at 14700 whereas on the higher end resistance is placed at 15250.


Derivative

Markets posted a wild swing during the first week of March with the benchmark index Nifty traded in a ~600 points range. Nifty index outperformed the Bank Nifty index by ~1.5% with both the indices closing the week with ~3%/1.5% gains. However, during the closing part of the week, both the index future added fresh short positions as the open interest soared higher along with a fall in the underlying price. FIIs index futures long/short for the March series continued to trend lower from 3x at the beginning of the series to 1.3x level as they added fresh short positions to hedge against the long exposures. On the options front (March 25, 2021 expiry), Nifty 15200CE and above call option strike price have witnessed fresh writing, hinting a formation of a ceiling level for the index around the mentioned strike price for the March series.