BSE Sensex and NSE Nifty 50 tumbled nearly one per cent on opening on the weekly options expiry day today, amid a global-selloff. Analysts expect high volatility in domestic markets on the back of weekly futures and options contracts expiry. On Thursday, 17700 may act as immediate support on the Nifty, while 18000-18100 as immediate resistance, analysts said. As for the Bank Nifty, 37000 level is likely to act as support level, and 38000-38200 as immediate resistance. Both Nifty 50 index and Bank Nifty fell over a per cent on Thursday. India VIX, the volatility index, jumped 2.64 per cent to 17.68 levels.
Rajesh Palviya, VP – Research (Head Technical & Derivatives), Axis Securities
Nifty 50 has seen an increase in Open Interest of 10% with an increase in price of 4.01% indicating Long Build Up. Bank Nifty has seen decrease in Open Interest of -3.52% with increase in price of 7.31% indicating Short Covering. Option data indicates a probable trading range of Bank Nifty for the day between 37200 to 38200 & that for Nifty at 17700-18100. The high Open Interest concentration on Call side is seen at 18000 strike followed by 18100 which may act as immediate resistance. The high Open Interest concentration on Put side is seen at 17800 strike followed by 17700 which may act as immediate support. The high Open Interest concentration on Call side is seen at 37800 strike followed by 38000 and 38200 which may act as immediate resistance. The high Open Interest concentration on Put side is seen at 37500 strike followed by 37300 and 37000 which may act as immediate support.
Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst and founder, Gemstone Equity Research & Advisory Services
In yesterday’s session, a significant amount of Put Writing was done on 17800 and 17900 strikes to the tune of 3.5 million shares and 3.4 million shares respectively. On an EOD basis, the strikes of 17800 has maximum PUT OI of 5.8 million. This means that this point is likely to act as support for Thursday. There are brighter chances of this point being defended; however, Nifty’s behavior vis-a-vis the levels of 17800 will be crucial to watch. On the upside, 18000 levels hold maximum Call OI.
Coming to Bank Nifty, it has room to get a bit more weak as compared to Nifty after a strong relative outperformance over the past few days. The strikes of 38000 hold maximum Call OI which was obviously to act as a strong resistance in the event of any upside. However, due to a gap-down opening, we would like to focus more today on the 37000 strikes which hold the highest PUT OI. This point is likely to act as support in the event of any weakness and this point is expected to stay defended unless convincingly violated.
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