High OI Bases Building Up On Call Strikes

FIIs continued to short, while marginal stock-specific short covering is experienced. Index futures OI continues to remain high

The 22,500 has highest Call OI followed by 23,000/ 25,500/ 24,500/ 22,700/ 22,650/ 22,800/ 22,900/ 23,500/ 23,100 strikes, while 22,500/ 22,300/ 22,700/ 23,000/ 23,200/ 25,500/ 24,000/ 24,000/ 23,500 strikes recorded heavy build-up of Call OI.

Coming to the Put side, maximum Put OI is seen at 20,800 followed by 21,000/ 21,100/ 21,000/ 21,500/ 21,700/ 21,300 strikes. Further, 20,800/ 21,100/ 21,500/ 21,800/ 22,100/ 22,200 strikes witnessed reasonable addition of Put OI.

Dhirender Singh Bisht, associate vice-president (technical research) at SMC Global Securities Ltd, said: “Looking at Nifty’s derivatives data, the highest Call Open Interest was observed at the 22,500 strike, while Put writers were positioned at the 21,800 strike.”

The unabated selling pressure at highs triggered significant higher Call writing than the Puts and 23000 Call strike holds nearly one crore shares. Also, the major Put base is visible only at 20.800 strike suggesting immediate support. Considering Nifty closed below 22,800 level, continued weakness towards these levels shouldn’t be ruled out.

“Broader indices, including Nifty and Bank Nifty, remained under pressure and closed in the red. Nifty closed approximately three per cent down, while Bank Nifty corrected by 1.3 per cent on a weekly basis. Selling was witnessed across sectors, with media, midcap, and small-cap stocks being the major losers.”

For the week ended February 28, 2025, BSE Sensex closed at 73,198.10 points, a net loss of 2,112.96 points or 2.80 per cent, from the previous week’s (February 21) closing of 75,311.06 points. NSE Nifty too fell by 671.20 points or 2.94 per cent to 22,124.70 points from 22,795.90 points a week ago.

Bisht forecasts: “For the upcoming sessions, Nifty could face resistance in 22550-22600 zone whereas Bank Nifty resistance placed in 48900-48800 zone.”

“Implied Volatility for Nifty’s Call options settled at 12.49 per cent, while Put options concluded at 13.65 per cent. The India VIX, a key indicator of market volatility, concluded the week at 13.31 per cent. The Put-Call Ratio of Open Interest stood at 1.05 for the week.”

“The Nifty rollover rate has risen to 83.57 per cent, surpassing last month’s rate and the three-month average of 79.26 per cent, indicating strong momentum for the March series. Similarly, the Bank Nifty rollover stood at 81.64 per cent, higher than last month’s 79.13 per cent and the three-month average of 74.59 per cent, suggesting robust momentum for Bank Nifty as well. The increased rollover in Nifty suggests positions were carried at market lows, with most rollovers occurring in the 22,550-22,600 futures range whereas Nifty closed below these levels on Friday’s session.” India VIX moved up 4.53 per cent to 13.91 level.

FIIs continued to short, while marginal stock-specific short covering is experienced. Index futures OI continues to remain high. FIIs net shorts positions remained high above 1.9 lakh contracts moving into settlement week. Thus continued volatility is expected in the coming sessions as well, according to ICICIdirect.com.

Bank Nifty

Bank Nifty NSE’s banking index closed the week at 48,344.70 points, lower by 636.50 or 1.29 per cent from the previous week’s closing of 48,981.20 points. “In Bank Nifty, the 48,900-48,800 future level serves as crucial support—failure to hold these levels may lead to a decline in both indices.”