Options data signals range-bound trading

The support level rose by 1,000 points to 25,000PE, while the resistance level remained at 26,000CE for a third consecutive week. The high premium in Nifty futures suggests that upward movements could be limited in the coming week.

The 26,000CE has highest Call OI followed by 26,50/ 25,400/ 25,450/ 25,500/ 25,600/ 25,700/ 25,900 strikes, while 26,500/ 26,000/ 25,400/ 25,600/ 25,700 strikes recorded heavy build-up of Call OI. Modest OI fall is seen at Call ITM strikes from 25,350 onwards.

Coming to the Put side, maximum Put OI is visible at 25,000 followed by 25,200/ 25,300/ 24,800/ 24,900/ 24,300/ 24,400/ 25,400/25,350/ 25,100 strikes. Further, 25,200/ 25,400/ 24,900/ 24,850/ 24,200/ 24,100 strikes recorded reasonable addition of Put OI.

Only 24,500PE strike witnessed significant Put OI fall.

Dhirender Singh Bisht, associate vice-president (technical research-equity) at SMC Global Securities Ltd, said: “In the derivatives market, Nifty highest Call Open Interest is at 25,400 and 25,500 strikes, while for Put side highest Open Interest was observed at the 25,000 and 25,200 strikes.”

A sustainable move above 25,000 is crucial to signal the start of a fresh uptrend on the back short covering among Call writers positions. According to ICICIdirect.com, notable Call writing is seen at both ATM and OTM strikes, signaling selling pressure at higher levels. The Put base for the upcoming week is seen at the OTM 25,000PE.

strike. Interestingly, more Put closures were observed for the monthly expiry rather than the weekly expiry which suggests weakness likely to continue.

“Major Indian indices surged last week in anticipation of a Fed rate cut in the upcoming announcement. NSE Nifty tested an all-time high, closing with a weekly gain of approximately two per cent, while Bank Nifty rose by over 2.5 per cent. Notable buying activity was observed in FMCG, private banking, and media stocks. In contrast, the Oil & Gas and Energy sectors lagged behind on the weekly charts,” observes Bisht.

BSE Sensex closed the week ended September 13, 2024, at 82,890.94 points, a net loss of 1,707.01 points or 2.10 per cent, from the previous week’s (September 6) closing of 81,183.93 points. For the week, NSE Nifty also fell by 504 points or 2.02 per cent to 25,356.50 from 24,852.5 points a week ago.

Bisht forecasts: “Traders are recommended to adopt a buy-on-dips strategy as long as the Nifty remains above 25,000 in the upcoming sessions. The index is expected to test the 25,500 level on the upside, with 25,000 as a key support level on the downside.”

Nifty futures leverage remains high, while FIIs and other market participants hold short positions. India VIX fell 5.06 per cent to 12.52 level.

“Implied Volatility for Nifty’s Call options settled at 11.94 per cent, while Put options concluded at 12.51 per cent. The India VIX, a key market volatility indicator, closed the week at 13.18 per cent. The Put-Call Ratio of Open Interest stood at 1.62 for the week,” added Bisht.

Bank Nifty

NSE’s banking index closed the week at 51,938.05 points, lower by 1,361.20 points or 2.69 per cent from the previous week’s closing of 50,576.85 points. “For the Bank Nifty, highest Call Open Interest is at 52,000 and 53,000 whereas for Put highest Open Interest is at the 51,500 and 51,000 strike, making it the crucial level to monitor for the upcoming week as support,” remarked Bisht.