5 cues from F&O mart: Fresh Call writing at 8,600, 8,800 to cap upside 

NEW DELHI: The Nifty50 slipped below its crucial support level of 8,600 on Thursday and fresh Call writing at 8,600 and 8,850 levels is likely to act as fresh hurdles for the Nifty50 in the October series.

Put option activity: There was hardly any Put writing, but Put unwinding was seen at strike prices 8,700 (46.29 lakh contract shed), 8,600 (30.37 lakh contracts shed), 8,500 (22.54 lakh contracts shed) and 8,750 (8.4 lakh contracts shed). A drop in open interest along with a fall in prices mostly indicates long unwinding.

Total Put open interest of 34.55 lakh contracts stood at strike price 8,500, which will act as a crucial base for the market in the October series, followed by strike price 8,300, which saw accumulation of 29.80 lakh contracts, while strike price 8,600 had 23.70 lakh contracts in open interest.

“On the options front, maximum Put OI was seen at strike price 8,500 followed by 8,600, while maximum Call OI stood at strike price 9,000 followed by 9,100,” Chandan Taparia, Derivatives & Technical Analyst - Equity Research at Anand Rathi Financial Services, told ETMarkets.com.

“We saw OI addition in many out-of-the-money options, as traders went for hedging ahead of the sudden decline in the broader market,” he said.


Call option activity: Brisk Call writing was seen at strike prices 8,600 (17.08 lakh contracts added), 8,700 (13.98 lakh contracts added), 8,750 (4.1 lakh contracts added), 8,800 (10.6 lakh contracts added) and 8850 (12.94 lakh contracts added).

The maximum Call open interest of 57.02 lakh contracts stood at strike price 8,800, which will act as a key resistance for the index in the October series, followed by strike price 9,000 which has accumulated 55.85 lakh contracts, while strike price 8,900 had 45.10 lakh contracts in open interest.

PCR: The Nifty50 Put-Call ratio (PCR) slipped below 1. 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, expanded by 33 per cent to 18.45 from 13.84 recorded in the previous session.

“India VIX jumped by 33.21 per cent to 18.45 as the market witnessed the second biggest intraday fall in the year since February 11, 2016. A surge in India VIX is a cause of concern for short-term traders,” Taparia said.

Nifty Bank: Nifty Bank corrected by more than 700 points from the opening level on Thursday towards the 19,000 level. “Nifty Bank has broken immediate support of 19,500 and if it fails to recover then selling may continue towards next support of 18,888 and 18,500 zones,” Taparia said. On the upside, it has multiple hurdle at 19,500 then 19,750 levels.