F&O expiry: Nifty may hit 16,400, Bank Nifty 36,500 on weekly expiry; trade with caution at higher levels

NSE Nifty 50 may trade in the 16,100-16,400 range today on weekly futures & options expiry, while 36,000 will act as an important level for Bank Nifty.

Nifty, Bank Nifty, F&O expiry
For the coming session, all eyes would be on the banking space, and any follow-up as well as sustainable buying beyond 36200 should open the doors for 36500 and beyond. Image: Reuters

NSE Nifty 50 may trade in the 16,100-16,400 range today on weekly futures & options expiry, while 36,000 will act as an important level for Bank Nifty. On Wednesday, Nifty logged fresh all-time high of 16,290.20 and ended the day at a record closing high of 16,258.80. Analysts expect some volatility on expiry day and advise investors to trade cautiously on Thursday. The overall trading range for Bank Nifty is expected to be between 35,000-36,500, said analysts. India VIX, the volatility gauge, cooled-off 3.89 per cent to 13.21 levels on Wednesday.

Check live prices: Nifty | Bank Nifty

On Nifty options, the maximum Call OI is at 16,300 strike with 95,071 contracts, followed by 16,400 strike price. While maximum Put OI is at 16,000, followed by 15,900. Call writing was seen at 16,350 and 16,400 strikes, while Put writing was seen at 16,200, then 16,250 level strikes. Call unwinding was at 16,100 and 16,000 strikes and put unwinding was seen at 15,300. For Bank Nifty options, the highest open interest on the call side in the weekly expiry is at 37,000, followed by 36,000 strike; while the highest OI on the put side is at 35,000-34,500 strike.

Rajesh Palviya, VP – Research (Head Technical & Derivatives), Axis Securities

Nifty as per the provisional data has witnessed Long Build Up with a price gain of 0.74% and increase in OI of 6.05 lakh shares compared with Tuesday, while Bank Nifty has also seen Long Build Up with price gain of 2.25% & OI addition of 0.85 lakh shares. The sentiment indicator PC Ratio (Nifty) is currently trading at 1.55 indicating positive bias with caution at higher levels. Nifty highest OI on the CALL side in the weekly expiry scheduled 5th August 2021, is at 16,300 (47.53L) and 16,400 (47.49L) strikes respectively wherein writing of 16.50 lakh shares and 16.05 lakh shares was witnessed at 16,350 and 16,400 strikes indicating strong resistance zone at 16,400. On the Put side highest OI is at 15,900 (47.01L) and 16,000 (49.91L) strikes; wherein writing of 39.39 lakh and 19.12 lakh shares was seen at 16,200 and 16,250 strikes, respectively, indicating a strong support zone. So, the most probable range for the weekly expiry is likely to be between 16,100 to 16,400.

In Bank Nifty the highest OI on the CALL side in the weekly expiry is at 36,000 (14.75L) and 37,000 (16.76L) strikes; while on the PUT side highest OI is at 35,500 (12.57L) and 35,000 (18.21) strike, with 36,000 acting as a pivotal level for this weekly expiry as there has been an addition of 1.75 lakh shares on CALL side and 8.89 lakh addition on PUT side suggesting that any sustained move on either side of this level will decide the trend in Bank Nifty. While on the writing front 35,500 put has seen writing of 10.98 lakh shares followed by 35,800 put writing 8.38 lakh shares indicating a strong support zone; overall range for Bank Nifty is likely to be between 36,200-36,500 to 35,000-35,200.

Ajit Mishra, VP – Research, Religare Broking

Nifty has finally regained momentum after spending two months in a consolidation range. It has tested a new milestone of 16,000+ zone as well and is trading up by 3% this week so far. As per the target of range breakout, Nifty may face resistance around 16,350 and it has almost reached closer to that zone. Besides, the derivatives data indicates the possibility of Nifty trading within the 16,200-16,300 zone on the weekly expiry day. In short, we may see the index take a breather tomorrow and settle closer to the 16,200 zone.

Bank Nifty has also witnessed a sharp rebound this week and attempted to surpass the resistance barrier of 36,200 as well. It is up by nearly 4% with noticeable participation from the banking and other financial majors. In line with the benchmark, it may also see a pause on the weekly expiry day; however, the bias would remain on the positive side. On the higher side, 36,200 may continue to act as an immediate hurdle while 35,500 would act as a cushion in case of any dip. The derivatives data are also in sync with the view.

Sameet Chavan, Chief Analyst – Technical and Derivatives, Angel Broking

Nifty 50, after the last two months of boredom, kick-started the August month with an upside gap, following it up with a bump up and more buying, topping the much-awaited milestone of 16000. One day ahead of the first weekly expiry of August series, the mighty bulls tightened grip and went on to extend the rally towards 16300. Collectively, we had a fabulous run this week to add more than three percent to the bulls’ kitty. This achievement wouldn’t have been possible without the participation of the banking space. It has been a spoilsport of late but we finally saw it taking the charge as it became the major contributor in the last couple of sessions. The banking index posted handsome gains of over 4% in merely three sessions and in the process, managed to surpass the sturdy wall of 36000 by a small margin.

Let’s take a look at the action in the F&O space. We observed meaningful long formation in Nifty; whereas, the banking index rallied due to a mix of both long and short covering. In the up move, the put writers added massive positions which resulted in highest open interest concentration shifting higher from 15500 to 16000 now. On the other side, traders are now eyeing 16300 and 16400 call strikes. For the coming session, all eyes would be on the banking space, and any follow-up, as well as sustainable buying beyond 36200, should open the doors for 36500 and beyond. Considering the strong up move in the last couple of sessions, the low-hanging fruit is already gone now. Hence, it would be advisable to avoid any aggressive bets for the expiry sessions especially in Nifty. Rather, one can look to lighten up longs if we reach the crucial psychological juncture of 16400-16500.

Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst and founder, Gemstone Equity Research & Advisory Services

Following a breakout on Tuesday, Nifty extended its up move on Wednesday. While it extended its gains, 16200 saw large Put writing; this means that market participants expect Nifty to trade in a range and not correct much. On the other hand, High and near-similar Call OI exists at 16300 and 16400. This indicates that the Nifty may broadly stay in a range and take some breather on weekly options expiry.

Bank Nifty presents a mixed picture. While it hit its high point, Call writing was observed between 36200 and 36400 levels. High Put writing was also witnessed across strikes between 35500 and 36000. Given this F&O reading, it is likely that the Bank Nifty may likely extend its up move, but broadly stay in a range with limited upsides on the weekly options expiry day.

(The recommendations in this story are by the respective research analysts and brokerage firms. Financial Express Online does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)

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