F&O Tracker: Nifty likely to face resistance at 6300

Nifty futures after testing its all time high, witnessed profit booking followed by some short addition of positions in the market for straight six days, as futures open interest increased by around 6% along with a fall in price by over 3%.

Traders have lighten their positions as the IIP numbers and mainly the inflation numbers were quite disappointing, thus increasing the probability of a rate hike in RBI policy on Wednesday.

Also, their eyes would be on the decision of tapering in the US Fed meet. Thus, we may see high uncertainty and volatility to increase in coming days.

Nifty PCR OI has been struggling to hold above one psychological level, indicating lack of buying strength in the market.

The maximum OI concentration for the put option is intact at 6000 strike price, whereas for the call option, we have seen a shift from 6500 to 6300 strike price, suggesting 6300 levels would now act as an important resistance.

Implied volatility is trading at lower levels of around 18, considering the upcoming events which may lead to high uncertainty.

Implied volatility may rise from current levels which may work positively for strategies like long strangle or straddle strategies. A long strangle can be executed by buying 6100PE and 6200CE, where total premium outflow would be around 100 points and can be exited from if premium narrows to 70 points.

Profits can be booked if premium trades over 150 odd points. The breakeven points are 6000 & 6300 levels in this strategy. Technically, Nifty futures holds immediate support around 6130 levels, sustaining below which we may see serious profit-booking towards 6000 levels.