On the weekly options expiry day, BSE Sensex and Nifty 50 may see a gap-up start. However, analysts expect high volatility in domestic markets on the back of the scheduled monthly expiry of the June month contracts
On the weekly options expiry day, BSE Sensex and Nifty 50 may see a gap-up start. However, analysts expect high volatility in domestic markets on the back of scheduled monthly expiry of the June month contracts. On Thursday, Nifty 50 may trade in 15600-15800 range, while 35,000 will remain an important level for Bank Nifty index. Both Nifty 50 and Bank Nifty indices ended in the red on Wednesday. India VIX, the volatility index, gained 4.25 per cent to 15.37 on Wednesday. Analysts advise that while trading trading Nifty and Bank Nifty on weekly expiry day, look for options strikes that have highest OI in both Call and Put. “Never trade beyond those options strikes having highest open interest (OI) build-up,” Ajit Mishra, VP – Research, Religare Broking, told Financial Express Online.
On Nifty options, maximum call open interest was seen at 15,800 strike with 1.09 lakh contracts, followed by 15,900 strike with 87,205 contracts. Maximum put OI was at 15,500 strike with 71,470 contracts, and then at 15,600 strike with 62,875 contracts. Call writing was seen at 15,800 and 15,750 strikes, while Put writing was seen at 15,550, then 15,600 level strikes. Call unwinding was at 16,000 and 16,150 strikes and put unwinding was seen at 15,800 and 15,000. For Bank Nifty options, the highest open interest on the call side in the weekly expiry is at 35,000, followed by 36,000 strike; while the highest OI on the put side is at 34,000-33,500 strike.
Ajit Mishra, VP – Research, Religare Broking
Markets have been consolidating in a range from the beginning of the month, holding strongly above the 15,400 (the previous record high zone now acting as support). However, the momentum is missing largely due to the underperformance of the banking index which holds considerable weightage in the index. At the same time, the contribution from the other sectors like IT, energy, FMCG is helping the index to sustain around the record highs. Today, on the monthly expiry day, we may see the index to trade range-bound initially however the tone might change in the latter half as we have Reliance AGM also scheduled. Keeping in mind, traders may opt for the below strategy in Nifty and BankNifty for the day.
1. Sell Nifty 15700 Straddle
In this strategy, traders would sell both Call and Put of 15700 strikes of June 24 expiry which closed around 53 and 57 respectively so the total premium received would be 110. We advise maintaining a stop loss at 160 for the target of 20.
2. Buy BankNifty on dips around 34,250 spot
Since we’ve multiple support in BankNifty around 34,250 spot levels, we may see a rebound in the index if it comes closer to the zone during the day. It last closed at 34,574 levels so traders should wait for the opportunity. They should maintain the stop loss at 33,900 levels for the target of 34700-34800 levels.
Sameet Chavan, Chief Technical Analyst, Angel Broking
The way market has behaved in last couple of sessions, it is quite certain that it’s struggling at higher levels and it needs some solid trigger to go beyond record highs. On Wednesday, since morning, call writers were quite active and the result of this was clearly visible in the latter half, when we witnessed a sudden drop from 15750-15780 levels. For the monthly expiry, 15600-15800 is to be seen as trading range. On Thursday, if any recovery has to happen, it will only be triggered by the extreme oversold condition of the PUT CALL RATIO which is below 1 now. Hence, it’s better not to create fresh short positions if we have a sluggish or gap down opening.
Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst and founder, Gemstone Equity Research & Advisory Services
On the day ahead of the monthly derivative expiry and also the weekly options expiry, the Strikes of 15900 heavy call writing of nearly 2 million shares. NIFTY also saw unwinding of CALL OI at 15700 and 15600 levels. This means that if the NIFTY stays below 15700, it may see some more weakness. Right now, highest PUT OI stands at 15500 and this level is unlikely to get violated. BANKNIFTY has maximum Call OI concentration at 35000; it is unlikely to move past this point tomorrow.
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