Call, Put OI in quantum jump to higher bands

The resistance level, which remained at 18,800CE for two weeks (July 10-21), moved up by 1,100 points to 19,900CE and the support level rose to 19,800PE from 18,000PE. The highest Call OI is seen at 19,900 followed by 19,800/ 20,000/ 20,500/ 20,200/ 20,300 strikes, while 19,00/ 29,800/ 20,800/ 20,000. 19,850 strikes witnessed hefty build-up of Call OI.

Coming to the Put side, the maximum Put base is at 19,800 strike followed by 19,500/ 19,800/ 19,600/ 19,400/ 18,500/19,200 strikes. Further, 19,650/ 19,100/ 19,650/ 19,600 strikes recorded a reasonable addition of Put OI. From 19,800PE onwards, Put OI offloading was recorded till 20,300 strike.

Dhirender Singh Bisht, associate vice-president (technical research-equity) at SMC Global Securities Ltd, said: “Analysing derivatives data, it had observed that the highest Open Interest for Call options in Nifty was at the 19,900 level, followed by 20,000, while for Put options, the highest Open Interest concentration remained at the 19,800 strike.”

Put options writers were aggressive on Friday. After the session, the 19,900 Put now holds the highest OI base followed by 19,800 strike. On the other hand, Call option OI is significantly lower as Nifty scaled fresh highs. Hence, it may induce further short covering. However, Nifty is likely to move upwards to 19800-19900 levels in coming sessions.

“In last Friday’s session, the NSE Nifty index came close to the 18,000 level before experiencing a correction. Both major indices closed in green. On the flip side, the Nifty closed with a more modest gain of around one per cent. During the past week, the energy, healthcare and media sectors witnessed substantial gains, while the IT index saw a sharp decline,” added Bisht.

BSE Sensex closed the week ended July 21, 2023, at 66,684.26 points, a net rise of 3,704.89 points or 5.88 per cent, from the previous week’s (July 23) closing of 62,979.37 points. During the week, NSE Nifty rose by 1,079.50 points or 5.78 per cent to 19,745 points from 18,665.50 points a week ago.

Bisht forecasts: “Traders are advised to keep a close watch on upcoming major result announcements from heavyweight companies, as this could lead to stock-specific movements in the market. As for the Nifty, the major expected range lies between 19450-20000 levels.”

India VIX fell 2.55 per cent to 11.48 level. “The Implied Volatility for Call options concluded at 10.88 per cent, while Put options closed at 11.35 per cent. The Nifty VIX, a measure of market volatility, ended the week at 11.79 per cent. The Put-Call Ratio of Open Interest settled at 1.37 for the week, indicating positive sentiment of the market participants,” observed Bisht.

Bank Nifty

NSE’s banking index closed the week at 46,075.20 points, a gain of 2,452.30 points or 5.62 per cent from the previous week’s closing of 43,622.90 points. Bank Nifty PCR is 0.843 level. “Bank Nifty outperforming the Nifty and ending with significant gains of over 2.8 per cent last Friday.

Based on Open Interest, the current trading range for Bank Nifty is expected to remain between 46,000 and 47,000 levels,” added Bisth.