NEW DELHI: The Nifty50 closed above its crucial support level at 8,000 on Wednesday, but fresh Call writing at strike prices 8100 and 8200 levels is likely to cap upside on the F&O expiry day.
Put option activity: Put writing was seen at strike prices 7,800 (2.5 lakh contracts added) and 8,000 (7.7 lakh contracts added), while there was brisk Put unwinding at strike prices 8,100 (2.5 lakh contracts shed), 8,200 (1.2 lakh contracts shed), 8,300 (2.4 lakh contracts shed), 8,400 (4.4 lakh contracts shed) and 9,000 (3.7 lakh contracts shed).
Total Put open interest of 51.61 lakh contracts stood at strike prices 8,000, which will act as a crucial base for the market in the November series, followed by strike price 7,800, which saw accumulation of 36.46 lakh contracts, while strike price 8,100 had 11.99 lakh contracts in open interest.
“On the options front, maximum Put OI was seen at strike price 8,000 followed by 7,800 while maximum Call OI was seen at strike price 8,200,” Chandan Taparia, Derivatives & Technical Analyst - Equity Research at Anand Rathi Financial Services, told ETMarkets.com.
“We have seen sustained Put writing at strike price 8,000, which may offer support, while Call writing at strike price 8,100 would restrict any bounceback on expiry day,” he said.
The Nifty50 Put-Call ratio (PCR) closed above 1 at 1.08. A PCR above 1 is considered bullish while a PCR below 1 is considered bearish.
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Call option activity: Fresh Call writing was seen at strike prices 8,100 (3.9 lakh contracts added) and 8,200 (3.5 lakh contracts added), while Call unwinding was seen at strike prices 8,000 (5.2 contracts shed), 8,400 (3.1 contracts shed), 8,500 (3.5 contracts shed) and 8,600 (2.3 contracts shed).
The maximum Call open interest of 53.53 lakh contracts now stands at strike price 8,200, which will act as a key resistance for the index in the November series, followed by strike price 8,100, which has accumulated 49.30 lakh contracts, while strike price 8,500 had 48.79 lakh contracts in open interest.
PCR: The Nifty50 Put-Call ratio (PCR) closed above 1 at 1.08. A PCR above 1 is considered bullish while a PCR below 1 is considered bearish.
India VIX: The India Volatility Index (VIX), a gauge of the market’s short-term expectation of volatility, contracted by 2.3 per cent to 18.04 on Wednesday from 18.46 recorded in the previous session.
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Nifty Bank: Nifty Bank has been underperforming the broader market, but managed to hold above the 18,500 level. “It has support near to 18,350 and then 18,150 level, while on the upside, hurdles are seen at 18,800 and then 19,000 levels," said Taparia.
