F&O expiry week outlook: Nifty to hit 16000 if it closes above 15700, follow stock centric approach for gains

The Nifty futures are now trading at premium and the PCR-OI has also come close to 1, which is a positive development.

Nifty, Bank Nifty
In F&O space, we observed open interest reduction in Nifty as well as Bank Nifty. Image: Pexels

By Sameet Chavan

The Indian equity market has seen an immensely volatile weekly expiry session on Thursday, wherein the benchmark index started the session on an optimistic note. The initial buoyant move in the index got aggressively sold into, dragging it towards the day’s low, but soon after, it recouped from the lows and once again cheered the overall sentiments. With all day-long roller-coaster moves, the NSE Nifty 50 finally concluded the day in green, with gains of near a percent, a tad above the 15550 level.

Technically, the market has attracted the trader’s community with its volatility, and also, significant sectors have witnessed strong moves that have added the cherry on the cake. However, the inherent trend remains tentative as the index hovers below the critical zone of 15700. As far as levels are concerned, the 15300-15350 zone is expected to cushion any sort of correction in the near term. While on the contrary, until a decisive breakthrough is not seen above the 15700 zone, the challenging period is likely to persist in the market.

A broad-based buying has been observed across the bourses on the sectoral front, wherein the significant benefactors that boosted the positive sentiments were from the Auto space, followed by IT. Looking at the recent development, traders are advised to keep following the stock-centric approach for better trading opportunities and keep a close tab on global developments.

In F&O space, we observed open interest reduction in Nifty as well as BankNifty. Stronger hand continues with their relentless selling in equities but preferred buying in index and stock futures segment. This has resulted in their index futures Long short Ratio surging to 24%. Interestingly, the Nifty futures are now trading at premium and the PCR-OI has also come close to 1, which is a positive development. For the coming monthly series, 15500 put and 16000 call strikes are attracting traders’ attention. Hence, we believe 15400 – 15500 shall act as an immediate demand zone, whereas any sustainable move on the closing basis above 15700 shall open doors for the psychological mark of 16000.

(Sameet Chavan is a Chief Analyst-Technical and Derivatives at Angel One. Views expressed are the author’s own. Please consult your financial advisor before investing.)

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