F&O expiry: Nifty likely to trade in slender range, 18500 key level to watch; stick to stock-specific approach

A decisive closure above 18700 for Nifty could only bring some cheer back into the market, and then we may expect the northward journey to continue

December 8, 2022 09:34 IST

Market is likely to remain in a slender range. Keep a close tab 18500, 18700 levels. Continue with the stock-specific approach.

By Sameet Chavan

Technically speaking, a sign of timidness is evident as there is no cue of follow-up buying in the index to levitate the sentiments. The recent developments construe a motion of tentativeness among the market participants as Nifty plunged to test the critical support zone. However, till the sacrosanct of 18500 is withheld, the view of buy on dip and sell on rise remains unscathed. The lack of firm buying is the only worrisome, signifying the indecisiveness among the bulls to retract the market.

On the higher end, a decisive closure above 18700 could only bring some cheer back into the market, and then we may expect the northward journey to continue. Meanwhile, any breach below 18500 could dampen the sentiments further and Nifty could plunge towards the next support of 18400.

FIIs were net sellers in the cash market segment to the tune of Rs. 1242 crores. Simultaneously, in Index futures, they sold worth Rs. 1218 crores with a marginal rise in open interest, indicating a blend of short formation and long unwinding. Yesterday, we could hardly see any relevant build-up in key indices. Stronger hands added fresh shorts in index and stock futures segment. As a result, their index futures Long short ratio has plunged to 58% now.

On options front, put writers of 18600 strike ran for shelter and fresh build-up was seen in 18350-18500 strike. Meanwhile, 18600 and 18800 call strikes added massive positions, clearly suggesting 18600 is likely to act as a hurdle for today’s weekly expiry session. Interestingly, we have concluded the session at a crucial support zone and PCR-OI of 0.76 is hinting that the market is now in the oversold trajectory.

Going forward, the market is likely to remain in a slender range. We reiterate keeping a close tab on the mentioned levels. Also, one should continue with the stock-specific approach, as even though the indices may not be doing much, the individual stocks are not at all short of action. Also, one should stay abreast with global developments.

(Sameet Chavan is the Chief Analyst-Technical and Derivatives at Angel Broking. Views expressed are the author’s own.)

This article was first uploaded on December eight, twenty twenty-two, at thirty-four minutes past nine in the morning.