Fall in Call OI bases

The 19,800CE has highest Call OI followed by 19,900/ 20,000/ 19,850/ 20,500/20,300/ 20,100 strikes, while 19,700/ 19,900/ 19,750/20,200 strikes recorded heavy to moderate addition of Call OI.

Coming to the Put side, maximum Put OI is seen at 19,700 followed by 19,600/ 19,000/ 19,300/ 19,500/ 19,800/ 18,800 strikes. Further, 19,700/ 19,600/ 19,400/ 19,500 strikes witnessed reasonable build-up of Put OI.

Noteworthy writing was seen at ATM 19,600 and 19,500 Put strikes, while Call bases are significantly lower. Derivatives analysts don’t expect Nifty to move below 19,450 level this week. Decline towards these levels should be considered as buying opportunity. However, move below 19,450 may aggravate the weakness and Nifty may even breach recent lows.

Dhirender Singh Bisht, associate vice-president (technical research-equity) at SMC Global Securities Ltd, said: “In Nifty, the highest Call Open Interest was concentrated at strikes 19,800 and 20,000, signifying potential resistance levels. Conversely, the highest Put Open Interest was recorded at strikes 19,700 and 19,600, suggesting significant support zones.”

“The market exhibited mixed performance over the past week. The Nifty recorded a modest 0.5 per cent gain, while the Bank Nifty experienced a slight 0.16 per cent loss. Among the sectors, PSU banks, IT and consumer durables faced declines, indicating a shift away from these segments. On the flip side, realty, auto and FMCG sectors demonstrated notable gains, reflecting a preference for these growth-oriented sectors,” added Bisht.

BSE Sensex closed the week ended October 13, 2023, at 66,282.74 points, a modest recovery of 287.11 points or 0.43 per cent, from the previous week’s (October 6) closing of 65,995.63 points. During the week, NSE Nifty too edged up by 97.55 points or 0.49 per cent to 19,751.05 points from 19,653.50 points a week ago.

Bisht forecasts: “The market is currently at a critical juncture with a delicate balance between support and resistance levels. We expect Nifty to trade in broader range of 20,000 and 19,500 whereas either side breakout can give further directional momentum to the index.”

“In terms of Implied Volatility (IV), Call options for Nifty settled at 9.83 per cent, while Put options concluded at 10.43 per cent. The Nifty VIX, which serves as a gauge of market volatility, closed the week at 10.62 per cent. The Put-Call Ratio of Open Interest (PCR OI) stood at 1.29 for the week,” remarked Bisht.

Volatility index India VIX closed flat at 10.70 level on Friday from 10.68 on Thursday. India VIX moved to its lowest levels since August suggesting aggressive Put writing. Until there’s closure among Put writers, positive bias should continue.

Bank Nifty

NSE’s banking index closed the week at 44,287.95 points, further lower by 72.65 points or 0.16 per cent from the previous week’s closing of 44,360.60 points. “For the Bank Nifty, the highest Call Open Interest was concentrated at strikes 44,500 and 45,000. Meanwhile, the highest Put Open Interest was observed at strikes 44,300 and 44,000,” remarked Bisht.