By Rajesh Palviya
In Nifty current series there has been a Short Covering witnessed with increase in price of 2.10% and decrease in OI by 8% as of Wednesday, wherein there was unwinding of 8.88 lakh shares in OI, decreasing from 112.81 lakh to 103.93 lakh shares. Nifty current month rollover stands at 14% as of Wednesday, while Nifty Put Call Ratio, a sentiment indicator used by traders to gauge the market sentiment and mood, is currently at 0.82 compared to 1.13 of last week, indicating a flat-to-negative movement for expiry.
Nifty Put options OI distribution shows that 16,800 has highest OI concentration followed by 16,700 & 16,600 which may act as resistance for current expiry and on the Call front 16,200 followed by 16,300 & 16,400 witnessed significant OI concentration and may act as support for current expiry.
In WEEKLY options there was Call writing seen at 16,800 strike followed by 16,700 & 16,600 while on the Put side noticeable activity of writing was witnessed in 16,200 ,16,300 & 16,400 strike prices. Options data suggest an immediate trading range between 16,800 and 16,200 levels.
Nifty OI Concentration
Nifty Option OI Change
Nifty Bank Outlook
In current series there has been a Long Addition witnessed in Bank Nifty Fut with an increase in price of 1.39% and increase in OI by 4% as of Wednesday wherein there was unwinding of 0.97 lakh shares in OI, decreasing from 23.79 lakh to 22.82 lakh shares. Bank Nifty Current series rollover stands at 9% as on today, while Bank Nifty Put Call Ratio, a sentiment indicator used by traders to gauge the market sentiment and mood, is currently at 0.95 compared to 0.99 of last week indicating flat-to-positive movement for expiry.
Bank Nifty Put options OI distribution shows that 35,000 has highest OI concentration followed by 35,500 & 34,500 which may act as support for current expiry and on the Call front 36,000 followed by 36,500 & 36,200 witnessed significant OI concentration and may act as resistance.In weekly options Call writing seen at 35,000, 35,500 & 34,500 strike while on the put side it was seen at 36,000, 36,500 & 36,200 Options data indicated an immediate trading range between 35,000 and 36,500 levels.
Bank Nifty Open Interest Concentration
Bank Nifty Open Interest Change
Nifty 50 trading strategy for weekly F&O expiry
The strategy which we are suggesting for the Weekly EXPIRY scheduled on 09th June is a Bearish strategy namely PUT LADDER, which involves Buying of one lot of Nifty 16,500 PUT @ 192 & selling of one lot each of 16,300 PUT @ 115 & one lot of 16,100 PUT @ 66. The maximum profit of Rs 9,450/- will be attained at 16,300 levels, while strategy will start making loss below 15,900. The cost of the strategy involves outflow is Rs 550/-, which is the maximum loss if Nifty closes & remains above 16,490 levels on expiry, however any sharper movement on lower side could result in losses and, as an extra put has been sold it’s advisable to exit the strategy in total to avoid UNLIMITED losses below 15,900. Break Even points of the strategy are 16,489 on Upside & 15,889 on the lower side.
(Rajesh Palviya, VP – Research (Head Technical and Derivative) at Axis Securities. Views expressed are the author’s own.)