Options data holds positive bias

The resistance level moved up by 200 points to 18,200CE and the support level also rose by 500 points to 17,500PE. The 18,200CE has highest Call OI base followed by 18,300/ 19,200/ 18,400/19,000/18,700 strikes, while 19,200/ 18,200/18,300/ 18,800/18,500/18,600 strikes recorded significant build-up of Call OI.

Coming to the Put side, maximum Put OI is seen at 17,500 followed by 17,800/18,200/ 18,000/ 18,100/ 17,800/ 17,70/ 17,000 strikes. Further, 17,700/ 17,500/ 17,400/18,100/18,200/ 17,800 strikes witnessed reasonable addition of Put OI.

Dhirender Singh Bisht, senior research analyst (derivatives) at SMC Global Securities Ltd, said: "From derivatives front, Call writers remained active at 18200 & 18300 strikes, while marginal Put writing was observed at 18000 put strike."

From rollover to January derivatives series perspective, Nifty Futures OI declined marginally compared to the last series and it was lowest OI seen at inception since July series as short positions were covered in the recent declines. At the same time, the Nifty premium declined to just 85 points on Friday from 110 points seen on settlement day. Normalisation in premium bodes well with the expected stability in the markets. Nifty may trade with a positive bias, according to ICICIdirect.com.

"Indian markets rebounded in the last trading week of 2022 as Nifty surged more than 1.50 per cent over the week, while Banking index outperformed and closed the week with gains of more than three per cent. On the sectoral front, Nifty PSU banks advanced along with Metal, Reality and Auto space, while Nifty Pharma & FMCG counters remained under pressure," added Bisht.

BSE Sensex closed the week ended December 30, 2022, at 60,840.74 points, a recovery of 995.45 points or 1.66 per cent, from the previous week's closing of 59,845.29 points. NSE Nifty ended the week at 18,105.30 points, a rebound of 298.50 points or 1.67 per cent, from 17,806.80 points a week ago.

Bisht forecasts: "Technically 18250 would act as a strong resistance for Nifty as its 20-day exponential moving average on daily charts lies there. Overall, we expect the index to remain volatile in the upcoming week and expected to trade in a broader range. For Nifty, 18000-17850 zone would act as a strong support zone, while the 18250-18300 zone will likely cap any sharp upside in the prices."

Volatility index India VIX rose 0.37 per cent to 14.87 level. "The Implied Volatility of Calls closed at 13.49 per cent, while that for Put options closed at 14.25 per cent. The Nifty VIX for the week closed at 14.81 and is expected to remain volatile. PCR of OI for the week closed at 1.16," remarked Bisht.

FIIs turned net longs in index Futures at the start of January F&O series. The aggressive short build-up seen in the second half of the December series seems to have been closed and it seems like shorts rollover was not done. However, considering relatively aggressive writing at ATM and OTM Call strikes than Puts, a move above 18200 may trigger a fresh up move in the index.

Bank Nifty

NSE's banking index closed the week at 42,986.45 points, higher by 1,318.40 points or 3.16 per cent, from the previous week's closing of 41,668.05 points. The Bank Nifty-Nifty price ratio moved higher to 2.37 level, which is the highest level since March 2021. The Bank Nifty would continue to outperform and the ratio should head towards 2.42 level now.