Scattered OI Bases Point To Indecisiveness In Market

The resistance level remained at 25,500CE for a second consecutive week, while the support level fell by 500 points to 22,000PE. The 25,500CE has highest Call OI followed by 24,000/ 24,500/ 25,000/ 23,900/ 23,700/ 23,800 strikes, while 25,500/ 24,500/ 24,200/ 23,800/ 23,700/ 23,300/ 23,100 strikes recorded heavy addition of Call OI. However, no major OI fall visible on Call strikes.

Coming to the Put side, maximum Put OI is seen at 22,000PE followed by 22,100/ 22,200/ 22,300/ 22,400/ 22,500/ 22,800/ 23,000 strikes. Further, 22,500/ 22,100/ 21,700/ 21,100/ 22,300 strikes witnessed reasonable build-up of Put OI. On Put bases also, no OI offloading took place.

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 23,300 and 23,500 strikes.”

“FIIs ongoing selling and disappointing quarterly results weighed down the broader indices Nifty and Bank Nifty dropped over 2.5 per cent and two per cent, respectively on a weekly basis. Selling was seen across the sectors, with maximum damage seen in small-cap and mid-cap and realty stocks,” added Bisht.

Unabated selling pressure triggered significant higher Call writing than Puts. ATM 23,600 Call itself holds higher Call base than any near the money Put strikes. Thus, sustainability above 23,600 itself may trigger a round of covering towards 24,000 level. On the other hand, till Nifty is not sustaining above 23,600 level, sell on rise strategy may be adopted with support expected near 23200 levels.

For the week ended February 14, 2025, BSE Sensex closed at 75,939.21, a net loss of 1,920.98 points or 2.46 per cent, from the previous week’s (February 7) closing of 77,860.19 points. NSE Nifty too fell by 630.70 points or 2.67 per cent to 22,929.25 points from 23,559.95 points a week ago.

Bisht forecasts: “Technically Nifty is trading near to its support level at 22,800. If this level breached, it could test 22,500. On the upside, resistance is seen in the 23,300-23,400 range. A positive divergence is visible on the daily chart, but traders are avised to remain cautious during bounce and closely monitor these levels.”

India VIX moved up marginally by 0.40 per cent to 15.02 level.” Implied Volatility for Nifty’s Call options settled at 13.72 per cent, while Put options conclude at 14.03 per cent. The India VIX, a key market volatility indicator, closed the week at 14.96 per cent. The Put-Call ratio of Open Interest (PCR OI) for the week was 0.85,” remarked Bisht.

Nifty futures recorded further short covering. However, fresh short additions were also took place in last couple of sessions. However, net OI in Index futures has been declining compared to the OI seen in the January series. Ongoing short covering trend will hold the key for next directional move.

The stock-specific short covering took place in F&O space. However, marginal closure of positions were also seen in Index futures. No major short covering was experienced in the index. FIIs net shorts positions fell considerably, but once again gradual increase was observed during the week as FPIs selling continued. Despite that their net short contracts declined on a weekly basis from 1.7 lakh contracts to 1.6 lakh contracts.

Bank Nifty

NSE’s banking index closed the week at 49,099.45 points, lower by 1,059.40 or 2.11 per cent from the previous week’s closing of 50,158.85 points. “For Bank Nifty, the prominent Call OI was seen at the 49,500 and 50,000 strikes, whereas notable Put OI at the 49,000 strike,” observed Bisht.