Five cues from F&O mart: Fresh Put writing at 7,900-8,100 to lend support

NEW DELHI: The Nifty50 reclaimed its crucial resistance level at 8,100 on Thursday as December series F&O contracts expired. The index closed the December series on a positive note with series-to-series gains of 1.73 per cent to close at 8,103.

Fresh Put writing at strike prices 7,900 and 8,100 strengthened the bullish argument for the market. Nifty futures saw rollover of around 70 per cent with the roll cost of 0.47 per cent from December to January series as per the provisional data, while Bank Nifty saw rollover of 70 per cent, with the roll cost of 0.28 per cent.

“The Nifty50 saw better rollover compared with the average of last three months. September rollover was 65.60 per cent with roll cost of 0.55 per cent, October rollover was 69.97 per cent with roll cost of 0.46 per cent and November rollover was 63.10 per cent with Roll cost of 0.60 per cent,” Chandan Taparia, Derivatives & Technical Analyst - Equity Research at Anand Rathi Financial Services, told ETMarkets.com.

Put option activity: Put writing was seen at strike prices 7,900 (3.1 lakh contracts added), 7,950 (9.1 lakh contracts added), 8,000 (26.90 lakh contracts added), 8,050 (16.64 lakh contracts added), and 8,100 (17.11 lakh contracts added), while there was hardly any Put unwinding.

Total Put open interest of 91.33 lakh contracts stood at strike price 8,000, which will act as a crucial base for the market in the January series, followed by 7,900 which saw accumulation of 50.28 lakh contracts, while 7,800 had 39.82 lakh contracts in open interest.

“Options data indicated limited downside as the recent bottom might support to attract the buying interest while on the upside it has to surpass 8,230-8,250 levels to give the rally a fresh leg,” Taparia said.




Call option activity: There was hardly any Call writing but Call unwinding was seen in strike price 8000 (26.6 lakh contracts shed), followed by 8,050 (14.35 lakh contracts shed), and 8,100 (29.23 lakh contracts shed).

The maximum Call open interest of 52.58 lakh contracts stood at strike price 8,300, which will act as a key resistance for the index in the January series, followed by strike price 8,200, which saw accumulation of 49.57 lakh contracts, while strike price 8,400 had 29.80 lakh contracts in open interest.

PCR: The Nifty50 Put-Call ratio (PCR) closed above 1 at 1.09. 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 1.6 per cent to 15.28 on Thursday compared with 15.54 recorded in the previous session.

Nifty Bank: Nifty Bank managed to hold 17,800 level and is now headed towards 18,050 levels. It reclaimed 18,000 mark on closing basis after the consolidation seen in the last five trading sessions.

“Nifty Bank has support near to 18,800 and then towards 18,600 level while on the upside hurdles are seen at 18,150 and then towards 18,500 level,” said Taparia.