F&O: March expiry for Nifty seen around 5200-5300

Since the starting of March series, we have seen the put-call ratio (PCR) closing above 1.50. Now this ratio is more than 2, indicating consistent put writing in the March series. March expiry is likely to be in the range of 5200-5300 because option concentration continued to remain in the 5200-strike put with open interest of 60 lakh followed by the 5300 strike calls with open interest of more than 55 lakh shares.

Options accumulation clearly indicates support around the 5200 level and resistance close to 5300 level. April put-call ratio of open interest rose during the week, finally closing at 1.62 levels which is once again within the comfort zone, indicating more put writing in the April series. Nifty so far witnessed a rollover of 48% and April Nifty futures managed to close at premium of 13 points, pointing to a long rollover.

Stock futures and index futures have positive cost-of-carry, hinting positive side rollover. The rollover seems to be lower-than-average in the past three month, indicating a sideways market.

Cement and telecom stocks have seen a good rollover while banking and auto are showing lower rollover as compared to the previous expiry. April option implied volatility decreased further to 17% which implies that option prices are trading at very low premiums as option players expect range-bound market in April series. The derivative data is indicating a positive mood in the market with intermediate support around 5200 levels.

By Vineet Sood, Sr Derivative Analyst, SMC Global Securities.