Options data signals pressure on positive bias

Registering the weakening steam in the market momentum, the resistance level fell by 400 points to 19,800CE, while the support level declined drastically by 1,100 points to 19,000PE. The 19,800CE has highest Call OI followed by 19,900/ 19,700/ 20,300/ 20,200/ 20,000/ 19,700 strikes, while 19,800/ 19,700/ 20,050/ 20,000/ 20,500/ 20,600 strikes recorded reasonable addition of Call OI.

Coming to the Put side, the maximum Put OI is seen at 19,000PE followed by 19,700/ 19,600/ 19,800/ 19,400/ 19,550/ 19,300/ 19,200/ 18,800/ 18,900 strikes. Further, 19,000/ 19,650/19,600/ 19,300/ 19,150 strikes witnessed moderate build-up of Put OI. Dhirender Singh Bisht, associate vice-president (technical research-equity) at SMC Global Securities Ltd, said: “When delving into the derivatives data for Nifty, the most substantial Call writing activity was observed at the 19,800 and 20,000 strike levels.

Conversely, the highest Open Interest for Put options was concentrated at the 19,000 strike level followed by 19,700 strike.” As per data from ICICIdirect.com, FIIs increased their longs in index futures as their net longs rose to 60,000 contracts. This is suggesting ongoing positive bias. Due to change in expiry schedule, Open Interest increased significantly in index options. However, considering ongoing trend and noteworthy option writing at ATM Put strikes, Nifty may remain positive till it is holding above 20,000 level.

“Nifty experienced a decline of over two per cent, whereas Bank Nifty fell by more than three per cent, demonstrating significant underperformance. Profit booking was evident throughout the market, with notable losers are the financial services, metal and pharmaceutical sectors last week,” added Bisht.

BSE Sensex closed the week ended September 22, 2023, at 66,009.15 points, a further recovery of 1,829.21 points or 2.69 per cent, from the previous week’s (September 15) closing of 67,838.63 points.

Bank Nifty

NSE’s banking index closed the week at 44,612.05 points, higher by 1,619.45 points or 3.50 per cent from the previous week’s closing of 46,231.50 points. “Turning our focus to Bank Nifty, the 45,000 strike exhibited the highest Call Open Interest, closely followed by the 45,200 strike. On the Put side, the 44,500 strike held the highest Open Interest, followed by 44,000 strike,” remarked Bisht. The OI base in Bank Nifty at ATM 46,000 Put and 46,500 Call strikes.

Due to sharp moves seen in the last few sessions, Call writers seem to be stuck in Bank Nifty. Most of the banking heavyweights are trading near their highest Call base.