5 cues from F&O mart: Strike price 8,300 likely to act as stiff resistance

NEW DELHI: The Nifty50 closed around its crucial level of 8,150 on Thursday, but fresh Call writing at strike prices 8,100 and 8,600 is likely to pose fresh hurdles for the index in case it starts trending higher.

After a gap-down opening on Thursday, the Nifty50 witnessed a roller-coaster ride due to huge intraday volatility. Nifty futures’ premium settled at 19 points.

Foreign institutional investors sold Rs 612 crore worth of stocks while DIIs offloaded stocks worth Rs 177 crore in the cash segment. FIIs sold Rs 1,520 crore worth of positions in the index futures and bought Rs 910 crore worth of positions in the index options.


Put option activity: There was hardly any Put writing, but Put unwinding was seen at strike price 7,500 (2.8 lakh contracts shed), followed by 7,800 (0.84 lakh contracts shed), 8,100 (2.05 lakh contracts shed) and 8,500 (1.5 lakh contracts shed).

Total Put open interest of 79.75 lakh contracts stood at strike price 8,000, which will act as a crucial base for the market in the December series, followed by strike price 8,100, which saw accumulation of 41.98 lakh contracts, while strike price 8,200 had 41.56 lakh contracts in open interest.

“On the options front, maximum Put OI was seen at strike price 8,000 followed by 8,100 while maximum Call OI was seen at strike price 8,300 followed by 8,200,” Chandan Taparia, Derivatives & Technical Analyst - Equity Research at Anand Rathi Financial Services, told ETMarkets.com.

“We have seen fresh Call writing in all the out of the money strike starting from strike price 8,100 while fresh writing started in strike price 8,200, which is restricting upside at 8,230 and 8,250 levels,” he said.

Call option activity: Fresh Call writing was seen at strike price 8,100 (1.6 lakh contracts added), followed by 8,200 (2.3 lakh contracts added), 8,300 (5.1 lakh contracts added), and 8,400 (3.8 lakh contracts added).

The maximum Call open interest of 58.95 lakh contracts now stands at strike price 8,300, which will act as a key resistance for the index in December series, followed by strike price 8,400 which has accumulated 48.52 lakh contracts, while strike price 8,200 had 48.48 lakh contracts in open interest.

PCR: The Nifty50 Put-Call ratio (PCR) closed above 1 at 1.15. 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 5.6 per cent to 15.65 on Thursday compared with 16.59 recorded in the previous session.

Nifty Bank: Nifty Bank opened negative but managed to hold 18,120-18,150 zones and headed towards 18,500 zones. "It outperformed the Nifty50 index but it has to surpass multiple hurdles placed at 18,700 to hit its next target of 19,000 and 19,250 zones," said Taparia.