Options data holds wide-range trading

The 19,800 strike has highest Call OI followed by 19,600/ 20,500/ 20,100/ 19,950/ 19,700/ 19,900/ 21,500/ 21000 strikes, while 19,600/19,550/ 19,700/ 29,000/ 19,500 strikes recorded reasonable addition of Call OI. Coming to the Put side, maximum Put OI is seen at 19,000 followed by 19,500/ 19,400/ 19,600/ 19,300/ 19,200/ 19,800 strikes. Further 19,400/ 19,550/ 19,150 strikes recorded moderate build-up of Put OI. Put OI offloading is seen at OTM strikes.

The latest options data is pointing to a decline of resistance level by 200 points to 19,800CE and support level by 500 points to 19,000PE.

Dhirender Singh Bisht, associate vice-president (technical research-equity) at SMC Global Securities Ltd, said: “Within the Nifty, the highest Call Open Interest was spread across various strikes with minimal differences, with notable writing activity seen at 19,600, 19,700, 19,800, and 20,000 strikes. Conversely, the highest Put Open Interest was registered at strikes 19,500 and 19,000, indicating substantial support levels.”

Major writing was recorded at ATM 19,700 and 19,600 Put strikes, while Call bases are significantly lower. Nifty may not move below the 19,600 level this week. Any dip can be considered as a buying opportunity and Nifty may extend the declines towards 19,400 level.

“In the week gone by, Nifty and Bank Nifty closed with losses of over one per cent as profit booking was observed at higher market levels. In terms of sectors, auto and small-cap stocks showed outperformance with respect to the market, while IT, consumer durables and financial services lagged behind on a weekly basis,” added Bisht.

BSE Sensex closed the week ended October 20, 2023, at 65,397.62 points, a fall of 885.12 points or 1.33 per cent, from the previous week’s (October 13) closing of 66,282.74 points. During the week, NSE Nifty too down by 208.40 points or 1.05 per cent to19,542.65 points from 19,751.05 points a week ago.

Bisht forecasts: “Specifically, in Nifty, the level of 19,800 is anticipated to serve as a strong resistance, while in Bank Nifty, the psychological level of 45,000 is significant. It is expected that Nifty will trade within a broader range of 19,800 and 19,400 points. A breakout on either side has the potential to provide further directional momentum to the index.”

India VIX fell 0.73 per cent to 10.82 level. Volatility index India VIX remained subdued and closed the week below 11 level once again absorbing geo-political uncertainties. Considering results from heavyweights during the week, ICICIdirect.com expects stock-specific actions to take front seat and Nifty may continue its range bound bias with support near 19,600 level.

“In terms of Implied Volatility, Call options for Nifty settled at 10.10 per cent, whereas Put options concluded at 11.21 per cent. The Nifty VIX, a key indicator of market volatility, ended the week at 10.90 per cent. The Put-Call Ratio of Open Interest stood at 0.88 for the week, indicating a higher level of Call writing compared to Put options. Notably, profit booking has been observed in the past few weeks at higher levels, which is now acting as a resistance for the market,” observed Bisht.

FIIs short positions fell during the last week and it cushioned the fall despite gap openings as Nifty

moved towards 19,800 level. However, selling pressure on last Friday rose as Nifty futures came into discount. Open Interest in Nifty declined and near month OI fell to just 93 lakh shares. Analysts forecast further short covering above 19,800-19,850 levels.

Bank Nifty

NSE’s banking index closed the week at 43,723.05 points, further lower by 564.90 points or 1.27 per cent from the previous week’s closing of 44,287.95 points. “For the Bank Nifty, the highest Call Open Interest was concentrated at strikes 44,500 and 45,000, while the highest Put Open Interest was at strike 43,000,” remarked Bisht.