F&O expiry outlook: Bank Nifty support at 36000, volatility in Nifty on cards; follow stock-centric approach
In options front, 17500 strike of both call and put has highest build-up for the coming weekly series, which is rare but this suggest some volatility on cards now.
By Sameet Chavan
As we alluded to in our previous commentary, post the stellar run in the week the market could take some breather, which was quite evident in Thursday’s session. However, the sustainability of the current zone could be perceived as a constructive setup from a short to medium-term perspective, wherein the undertone is likely to remain in favor of the bulls. The technical setup for NSE Nifty 50 index construes the formation of higher highs and higher bottoms, with the immediate support of the recent unfilled gap coinciding with 61.80 percent of the retracement of the fall placed at the 17327 level, which is expected to act as a firm demand zone. On the contrary, 17650 is the immediate hurdle, followed by the previous swing of 17800 odd levels.
As far as Bank Nifty is concerned, although we can see positive close every day, the daily range has shrunk drastically, indicating lack of momentum in heavyweight constituents. Since there was no major change in prices yesterday, the immediate resistance levels remain as it is, i.e., 36600 – 36800 and the support is placed at 36000. A move beyond 36800 would provide some impetus for the next leg of the rally and in this case, the banking index would certainly lead from the front to push the benchmark index towards 17800 – 18000.
Going ahead, more action is likely to be seen in the thematic stocks, and hence a pragmatic approach would be required in the current scenario. Looking at the recent development, any minor dip towards the mentioned support could be utilized by bulls, while better opportunities would be seen in a stock-centric approach.
Taking a glance at the F&O data, we observed decent correction to touch 15700 in the beginning of March series. Surprisingly, shorts were missing in this correction which was followed by decent longs when market rebounded to conclude the series around 17500 mark. Rollover for Nifty and Bank Nifty stood at 82% and 91%. We had a very strong rollovers and considering the price action it seems majority of the positions are on long side which has been rolled too. In options front, 17500 strike of both call and put has highest build-up for the coming weekly series, which is rare but this suggest some volatility on cards now.
(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.)