Options Data Signals Easing Steam In The Market

The resistance level fell by 1,950 points to 26,000CE, while the support level rose 1,900 points to 25,000PE. The latest options data on NSE after Friday’s session is pointing to declining levels of support and resistance. The 26,000CE has highest Call OI followed by 26,500/ 25,700/ 25,800/25,700/ 25,300/ 25,100/25,000 strikes, while 26,000/ 25,500/ 25,000/ 25,700/ 26,300/ 25,200/ 25,000 strikes recorded hefty build-up of Call OI. And there’s no fall at any Call strike.

Coming to the Put side, maximum Put OI is seen at 25,000PE followed by 24,900/ 24,500/ 24,700/ 25,100/ 25,200/ 24,400/ 24,200/ 25,030/ 23,100 strikes. Further, 24,950/ 24,900/ 24,400/ 24,500/ 24,100/ 24,000 strikes recorded reasonable addition of Put OI.

Barring 23,300/ 23,450 strikes, no Put strike witnessed any offloading.

Dhirender Singh Bisht, associate vice-president (technical research-equity) at SMC Global Securities Ltd, said: “In the derivatives market, the highest Call Open Interest for Nifty was seen at the 25,000 and 25,200 strikes, while the highest Put Open Interest was at the 25,000 and 24,900 strikes.”

Call option writers have pulled their positions down with a major Call base placed at 26,000 strike, which is likely to remain an immediate hurdle.

“After correcting from record highs, NSE Nifty closed flat on a weekly basis last week, while the Bank Nifty and Sensex closed with slight losses. The pharma, healthcare, and auto sectors showed notable outperformance, whereas profit-taking was evident in the metal, FMCG, and PSU bank sectors,” added Bisht.

BSE Sensex closed the week ended October 11, 2024, at 81,381.36 points, a marginal loss of 307.09 points or 0.37 per cent, from the previous week’s (October 4) closing of 81,688.45 points. For the week, NSE Nifty edged lower by 50.35 points or 0.20 per cent to 24,964.25 from 25,014.60 points a week ago.

Bisht forecasts: “Technically, NSE Nifty has next support at 24,800, while the 25,200-25,400 zone will serve as a key resistance area. We expect that bears will likely continue to dominate the markets in the coming sessions due to significant long unwinding from record highs. Traders should remain cautious before creating significant long positions in the market.”

India VIX fell 2.04 per cent to 13.22 level. “Implied Volatility for Nifty’s Call options settled at 12.31 per cent, while Put options concluded at 13.05 per cent. The India VIX, a key market volatility indicator, closed the week at 13.50 per cent. The Put-Call Ratio of Open Interest stood at 0.98 for the week,” observed Bisht.

Nifty OI fell from 1.7 crore shares to 1.4 crore shares during the first week of October F&O series. Also, the basis has declined marginally from the extreme levels over 200 points to 160 points on Friday. Hence, analysts forecast consolidation in Nifty for some more time and weakness may extend only if Nifty is unable to hold itself above 24,800 level during the week.

Bank Nifty

NSE’s banking index closed the week at 51,172.30 points, lower by 289.75 points or 0.56 per cent from the previous week’s closing of 51,462.05 points. “For Bank Nifty, the highest Call Open Interest was seen at the 51,500 and 52,000 strikes, with the highest Put Open Interest at the 51,000 strike,” said Bisht.