Wider Sideways Trading On Bearish Bias Likely

Implied Volatility for Nifty’s Call options settled at 13.39 per cent, while Put options concluded at 13.92%. The India VIX, a key market volatility indicator, closed the week at 14.63%

Based on the latest NSE data, the support level declined 3,000 points to 23,000PE, while the resistance level fell 1,000 points to 25,000CE, which has highest Call OI followed by 24,500/ 25,550/ 24,400/ 26,000/ 24,300/ 25,300/ 25,500/ 26,500/ 27,000/ 27,500/ 27,950 strikes, while 25,000/ 24,300/ 24,100/ 24,200/ 24,350/ 25,200 strikes recorded hefty build-up of Call OI. Select Call OTM strikes witnessed moderate OI fall.

Coming to the Put side, maximum Put OI is seen at 23,000PE followed by 22,250/ 22,500/ 22,300/ 22,500/ 22,800/ 23,200/ 23900/ 23,800/ 24,000/ 24,200/ 24,400/ 24,500/25,000 strikes. Further, the 23,000/ 23,300/ 22,250/ 23,400/ 23,800/23,900 strikes recorded a reasonable addition of Put OI. Marginal Call OI fall is visible at Put ITM strikes from 24,300PE inwards.

Dhirender Singh Bisht, associate vice-president (technical research-equity) at SMC Global Securities Ltd, said: “In the derivatives market, the significant Call Open Interest for Nifty seen at the 24,500 and 24,400 strikes, while the highest Put Open Interest was at the 24,000, 24,200 and 24,400 strikes.”

The market staged a modest recovery in last one hour on Friday. But no major covering was visible among Call writers. While the highest Call base is at 25,000CE, analysts expect fresh up leg only beyond 25,300 level. The current weakness was so far restricted. Hence, Nifty is expected to trade in 24,500-25,300 range.

“For the fourth consecutive week, NSE Nifty closed in the red due to weak earnings and FII selling in the cash market. FIIs have been net sellers throughout this month in the cash market. Nifty and Bank Nifty both closed with more than 2.5 per cent loss,” added Bisht.

BSE Sensex closed the week ended October 25, 2024, at 79,402.29 points, a net loss of 1,822.46 points or 2.24 per cent, from the previous week’s (October 18) closing of 81224.75 points. For the week, NSE Nifty also fell by 673.25 points or 2.70 per cent to 24,180.80 points from 24,854.05 points a week ago.

Bisht forecasts: “From a technical standpoint, the Nifty’s next support levels are at 23,800 and 23,500, while key resistance is at 24,500. Traders are advised to maintain lighter positions, and those looking to enter new long positions should wait for a fresh trigger. The market is generally seen as a sell on rise scenario until it trades below the 24,500 level.”

India VIX rose 4.74 per cent to 14.63 level. The Implied Volatility (V) rose significantly for both the Call and Put strikes that have highest OI bases.

“Implied Volatility for Nifty’s Call options settled at 13.39 per cent, while Put options concluded at 13.92 per cent. The India VIX, a key market volatility indicator, closed the week at 14.63 per cent. The Put-Call Ratio of Open Interest for the week was 0.86, indicating that Call writers are currently outnumbering Put writers,” observes Bisht.

Bank Nifty

NSE’s banking index closed the week at 50,787.45 points, lower by 1,267.45 points or 2.50 per cent from the previous week’s closing of 50,516.90 points.

“For Bank Nifty, the prominent Call Open Interest was seen at the 51,500 strike, whereas notable Put Open Interest at the 50,000 strike. More writing seen in Call options compared to Put options indicates pressure on a bounce,” remarked Bisht.