Easing OI Bases Point To Sideways Trading

The latest options data on NSE is pointing to narrowing trading range for the week ahead as the resistance level fell by 2,000 points to 24,500CE and the support level rose by 650 points to 22,000PE.

The 24,500CE has highest Call OI followed by 25,000/ 26,500/ 24,000/ 26,000/ 25,500/ 23,600 strikes, while 23,500/ 23,600/ 24,000/ 24,300/ 24,500/ 25,000 strikes recorded reasonable addition of Call OI. Only two Call OTM strikes 26,000/ 25,600 witnessed marginal OI fall.

Coming to the Put side, maximum Put OI is seen at 22,000PE followed by 21,800/ 21,850/ 22,200/ 22,400/ 22,500/ 22,700/ 22,800/ 22,900/ 23,000/ 23,500 strikes. Further, 21,800/ 22,000/ 22,400/ 22,600/ 23,000/22,900 strikes clocked moderate build-up of Put OI. Marginal to heavy Put OI addition is visible at 19,950/ 22,000/ 22,400/ 23,000/ 23,400 strikes. Minute Put OI fall is seen at select ITM strikes from 23,600PE onwards.

Dhirender Singh Bisht, associate vice-president (technical research) at SMC Global Securities Ltd, said: “In the derivatives market, prominent Call Open Interest for Nifty seen at the 24,000 and 23,800 strikes, while the notable Put Open Interest was at the 23,000 strikes.” According to ICICIdirect.com, no major Put unwinding was observed and fresh OI addition was seen at ATM strikes with highest Put base placed at 22,000 strike. On the other hand, Call writing also increased significantly with 24,500CE. Based on OI positions, an immediate range of 22,000-24,500 is more likely.

“The continuous selling by FIIs in the cash segment, along with earnings worries the Indian market and dragged down the broader indices. Nifty shed two per cent on the weekly chart, whereas Bank Nifty lost over three per cent. All major sectorial indices closed in the red, with FMCG and IT being the outliers, though both also closed in the red on the weekly chart. The major losers were PSU banks, Realty and the Consumer Durables sector,” added Bisht.

BSE Sensex closed the week ended January 10, 2025, at 77,378.91, a fall of 1,844.2 points or 2.32 per cent, from the previous week’s (January 3) closing of 79,223.11, points. For the week, NSE Nifty too declined by 573.25 points or 2.38 per cent to 23,431.50 points from 24,004.75 points a week ago.

Bisht forecasts: “From a technical perspective, the Nifty continues to trade below its 200EMA and similarly, the Bank Nifty also trades below its 200EMA. On the daily chart, Bank Nifty showed more weakness compared to the Nifty. For the Nifty, support is anticipated around 23,000, while resistance is expected at 23,800.”

Despite sell-off for three sessions, India VIX continues to hover in a broad range of 13-15 levels as India VIX, a key market volatility indicator, rose 1.76 per cent to 14.92 level.

“Implied Volatility for Nifty’s Call options settled at 14.10 per cent, while Put options conclude at 15.23 per cent. The India VIX closed the week at 14.66 per cent. The Put-Call Ratio of Open Interest for the week was 1.05,” remarked Bisht. Nifty futures recorded continued short additions. On weekly F&O expiry day, marginal closure of positions was visible. Net short positions by FIIs also rose on a weekly basis and moved to 2.3 lakh contracts in Index futures. It indicates possible another round of short covering if Nifty sustains current level this week.

Bank Nifty

NSE’s banking index closed the week at 48,734.15 points, lower by 2,254.65 or 4.42 per cent from the previous week’s closing of 50,988.80 points. “For Bank Nifty, the prominent Call OI was seen at the 50,000 and 49,000 strikes, whereas notable Put OI at the 48,000 strike,” observes Bisht.