Options hint at correction in Bank Nifty

Mumbai The Bank Nifty could witness a 3.3% move on either side from 24,500 this week, with a bias for the lower side.

While the index has of late outperformed the Nifty, options expiring on October 29 hint at weakness with the open interest-based put-call ratio (PCR) decreasing to 0.83 Friday from 0.92 a day ago. This indicates traders have sold a higher number of calls than puts on hopes of a correction and their being able to retain the premiums paid by the call buyers. The index closed at 24,478.3 Friday. The range for the week is 23,689-25,311, based on the combined value of the active 24,500 call and put.

Senior analysts such as Vikas Jain of Reliance Securities said that Tuesday or Wednesday could witness a bout of profit booking in financials if Nifty failed to cross the 12,050 level.


Rohit Srivastava, founder, IndiaCharts, said a conclusive break below 23,700 could witness the testing its 200-day simple moving average of 23,377.