On the weekly options expiry day, Nifty 50 index is likely to trade in the 15,600-15,900 range. While 34,800 will act as a pivotal level for Bank Nifty on Thursday. Both Nifty 50 and Bank Nifty indices ended in the red on Wednesday. India VIX, the volatility index, gained 0.32 per cent to 13.05 levels on Wednesday. Analysts advise to use open interest data of Nifty and Bank Nifty on the expiry day, to gauge the participants positioning (long buildup/ short buildup/ long unwinding/ short covering). “Always trade with strict stop loss because of theta (Time decay) on expiry day,” Ajit Mishra, VP – Research, Religare Broking, told Financial Express Online.
On Nifty options, the maximum Put OI is at 15,500 followed by 15,600 strike price. While maximum Call OI is at 15,900 followed by 15,800 strike price. Call writing was seen at 15,750 and 15,850 strikes, while Put writing was seen at 15,650, then 15,600 level strikes. Call unwinding was at 16,300 and 16,500 strikes and put unwinding was seen at 15,400 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 36,500 strike; while the highest OI on the put side is at 35,000-34,000 strike.
Rajesh Palviya, Vice President, Research (Head Technical & Derivatives), Axis Securities
Nifty as per the provisional data has witnessed Short Build Up with a price cut of -0.24% and increase in OI of 5.02lac shares (4.24%) compared with Tuesday, while in Bank Nifty also there has been Short build up with price cut of -0.71% & OI addition of 2.75lac shares(13%). India VIX indicator of market volatility is currently trading at 13% well below the monthly averages indicating the current trend to be stable with a tilt on upside. In Nifty, the highest OI on the CALL side in the weekly expiry scheduled on 1 July 2021 is at 15,800(57.55L) & 15,900(65L) strikes wherein writing of 9.72Lac shares was seen in 15,850 strike & 5.70Lac in 15900 strike, while on the PUT side highest OI is at 15,500(32.87L) & 15,600(30.71L) strikes and writing of 8.93Lac share was seen at 15,650 strike. So, the tentative range for the weekly expiry is likely to be between 15,900 to 15,600.
In Bank Nifty the highest OI on the CALL side in the weekly expiry is at 35,000 (24.09L) – 35,500(17.76L) & 36,000(15.34L) strike; while on the PUT side highest OI is at 35,000(15.14L) – 34,500(9.77L) & 34,000(10.12L) strike, with 34,800 acting as a pivotal level for this weekly expiry as there has been addition of 5.69Lac shares on CALL side & 2.34Lac addition on PUT side suggesting that any sustain move on either side of this level will decide the trend in Bank Nifty.
Sameet Chavan, Chief Technical Analyst, Angel Broking
Nifty started the week on a positive note and surpassed 15900 mark at opening on Monday. However, the index failed to continue the optimism and corrected gradually to end at 15720 ahead of the weekly expiry. In the last couple of sessions, we have not seen any significant build up of positions in Nifty but marginal shorts were seen in the Banking index. FIIs have unwound some of their index futures longs in this week so far. Our market is undergoing a consolidation phase and hence, options writers are quite active in spite of low intrinsic values (IVs). Good amount of call writing is seen in 15800 and 15900 strikes which should limit the upside for the expiry day. On the other hand, although maximum open interest in put options is at 15500 strike, decent positions are seen in 15700 and 15600 puts, indicating a support range. The Put call ratio for Nifty is below 1 which is a sign of an oversold market. This provides a set up similar to last expiry. Although, the data indicates probability of a range bound weekly expiry, we may see some short covering due to the oversold PCR. Here obviously the weakest link banking space becomes the deciding factor. If Nifty enters the support range on expiry day, then traders should look to buy at the money call option around the support zone of 15700-15650.
Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst and founder, Gemstone Equity Research & Advisory Services
Markets pared all their intraday gains and ended in negative on a day before the weekly options expiry day on Wednesday. The session saw high call writing on 15750 and 15900 strikes. Maximum addition of Call OI during the day. However, on a closing basis, the strike of 15900 continues to hold maximum Call OI as of now. This means that NIFTY is unlikely to move past this point even if it attempts any pullback rally. On the lower side, while 15650 put saw highest addition of PUT OI, maximum PUT OI stands at 15500. This means the NIFTY is unlikely to slip below this point. NIFTY is likely to see a trending day with upsides staying capped at 15800-15850 zone unless a tactical change in OI occurs.
Ashish Chaturmohta, Director Research, Sanctum Wealth Management
Nifty is currently trading in the sideways range of 15900-15600 in a broader uptrend and VIX multi months lows. Thus, leading to sideways to negative price action which could see reversal from 15650-15600 zone where build up in Put open interest is seen. Holding above 15600, longs can be created with stop loss of 15530 for target of 15850.
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