Options data holds range-bound trading

As per the latest options data on NSE, the resistance level declined by 500 points to 16,000CE, while support level remained at 15,000PE for a second consecutive week.

The 16,000CE strike has the highest Call OI followed by 16,300/ 15,700/15,500/ 16,100/16,400/ 16,500 strikes. 15,300/15,700/ 15,800/16,200 strikes witnessed reasonable addition of Call OI.

Coming to the Put side, maximum OI is seen at 15,000PE followed by 4,500/14,200/14,600/ 14,800/ 15,300/ 14,900/ 15,500 strikes, while 14,500/ 15,000/ 15,300/ 14,900 strikes recorded reasonable build-up of Put OI.

Owing to sharp declines, options writers stuck up across the Put strikes and the major Put base is still placed at 15,500 and 16,000 strikes for the monthly settlement. On the other hand, fresh Call writing is visible at 15,700 strike, which was the recent breakdown level. Hence, any recovery in the short term might be limited towards 15700.

Sectorally, fresh shorts took place in NBFCs and Cement stocks along with Consumer Discretionary space. Investors are advised to be cautious in these stocks in near term. Despite relative outperformance seen in the banking sector recently, shorts positions rose sharply in the last few sessions. Hence one should wait for some short covering before forming long positions at lower levels, as per the analysis by ICICIdirect.com.

Dhirender Singh Bisht, senior research analyst (derivatives) at SMC Global Securities Ltd, said: "From the derivatives front, Put writers were seen adding Open Interest at 15000 strike, while Call writers added hefty Open Interest at 15300, 15500 & 15700 strike."

Nifty declined by more than 2,000 points in the last three occasions seen since October, hence levels near 14600-14800 can be looked at from the reversal point of view.

"Indian markets witnessed a sharp sell-off in the week gone by as Nifty post loss of more than 5.50 per cent, while Bank Nifty also ended the week with a cut of nearly five per cent below 15,300 & 32,800 respectively. This was the third consecutive weekly fall for Bank Nifty, while second consecutive fall for Nifty," added Bisht.

For the week ended June 17, 2022, BSE Sensex closed at 51,360.42 points, a steep fall of 2,9943.02 points or 5.42 per cent, from the previous week's closing of 54,303.44 points. Registering a heavy loss of 908.30 points or 5.60 per cent, NSE Nifty ended the week at 15,293.50 points from 16,201.80 points a week ago.

Bisht forecasts: "From technical front, both the indices have closed below their 100-Day Exponential Moving Average on weekly charts which points towards limited upside in upcoming sessions. At the current juncture, we expect that volatility is likely to grip markets in the coming week with bias to remain in favour of bears. On the downside, 15000 levels will act as strong support for Nifty while 15500-15600 zone will cap any sharp upside."

Volatility index India VIX declined 0.48 per cent to 22.76 level. "Implied Volatility of Calls closed at 22.50 per cent, while that for Put options closed at 23.79 per cent. The Nifty VIX for the week closed at 22.87 per cent. PCR of OI for the week closed at 1.10," remarked Bisht.

FIIs net shorts rose sharply once again to the highest levels since March 2020 along with increase in short positions in stock futures. Hence, short covering activity is expected in the settlement week.

According to a report from ICICIdirect.com, from an index point of view, due to sharp declines, no major Put options base is visible and ATM 32000 strike hold the major option concentration which can act as support on the downsides. On the higher side, only the noticeable Call option base can be seen at 33500 strike. Moreover, the quantum of Call writing position is significantly higher than the Puts suggesting expectations of limited upsides.

Even on the F&O front, the net short OI by FIIs rose sharply. FIIs' net short positions moved to their highest levels since March 2020 with almost 1,47,000 contracts as they sold almost Rs5,400 crore in index futures last week. Also their net shorts in stock futures increased sharply last week as FIIs sold over Rs7,500 crore in stock futures.

Bank Nifty

NSE's banking index closed the week at 32,743.05 points, a major decline of 1,740.75 points or 5.04 per cent, from the previous week's closing of 34,483.80points.