OI Bases Shifting To Higher Bands

After hovering at same levels for three weeks, the resistance and the support levels moved up during the last week. Resistance level, which was at 24,000CE for three weeks in a row, rose 1,500 points to 25,500CE, while the support level also moved up by 1,600 points to 22,500 PE. The 25,500CE has highest Call OI followed by 25,000/24,600/ 24,500/ 24,800/ 24,400/ 24,300/ 24,200/ 24,700/ 23,800/ 23,700/23,600/ 23,500 strikes, while 23,800/ 24,000/ 24,050/ 23,500/ 24,200/ 24,500/ 25,000/ 25,500 strikes.

Coming to the Put side, 22,500PE has maximum Put OI followed by 22,700/ 22,800/ 22,900/ 22,400/ 22,300/ 22,000/ 21,100 strikes. Further, 23,200/ 21,100/ 23,100/ 22,700/ 22,500/ 22,400/ 22,000 strikes witnessed reasonable addition of Put OI. Minute OI fall at few OTM strikes on both the options chain.

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 23,500 and 23,000 strikes.”

Despite modest recovery, major Call writing is visible at near the money strikes with significant Call base placed remained at 23,500 strike. This makes a move beyond this level crucial for further recovery. On the other hand, Put concentration is placed at 23,200 and 23,000 strike for the coming week which should act as immediate support for the index.

“Nifty and Bank Nifty closed positive, with Bank Nifty outperforming, gaining over 1.25 per cent weekly. The central bank cut the Repo rate by 25bps after nearly five years, but the market failed to hold gains. Pharma, Metal, and Healthcare were the top gainers, while Realty and FMCG faced selling pressure on weekly basis,” added Bisht. For the week ended February 7, 2025, BSE Sensex closed at 77,860.19, a recovery of 354.23 points or 0.45 per cent, from the previous week’s (February 1) closing of 77,505.96 points. NSE Nifty too rebounded by 77.80 points or 0.33 per cent to 23,559.95 points from 23,482.15 points a week ago. Bisht forecasts: “Technically, Nifty is trading near its 200EMA on the daily chart, while Bank Nifty remains range-bound between the 100 and 200EMA. Both indices are sell-on-rise unless they sustain above their EMAs. Nifty has support at 23,200 and 23,100, with resistance at 24,000.”

Despite the stock-specific short covering, no major short covering was recorded in the index. India VIX fell 3.46 per cent to 13.68 level. “Implied Volatility for Nifty’s Call options settled at 13.19 per cent, while Put options conclude at 14.26 per cent. The India VIX, a key market volatility indicator, closed the week at 14.18 per cent. The Put-Call Ratio of Open Interest for the week was 1.04,” observed Bisht.

India VIX fell sharply as the market closed the week at 3-week lowest level. Analysts predict no major further fall in the volatility and there could be a fresh upward move in the coming sessions. Only a sustained move below 13.5 should consider as fresh positive for the markets.

FIIs net shorts positions largely remained intact moving into February series with net short contracts reaching to 1.7 lakh contracts, which is lower than the last week net short contracts of 3.5 lakh contracts, change of lot size from 25 to 75 is the major reason for this decline. Moreover, FIIs have turned net shorts in the Call options, suggesting expectations of limited upsides.

Bank Nifty

NSE’s banking index closed the week at 50,158.85 points, lower by 651.90 or 1.31 per cent from the previous week’s closing of 49,506.95 points. “For Bank Nifty, the prominent Call Open Interest was seen at the 51,000 strike, whereas notable Put Open Interest at the 50,000 strike,” remarked Bisht.