On the weekly alternatives expiry day, BSE Sensex and Nifty 50 may possibly see a gap-up get started. However, analysts count on higher volatility in domestic markets on the back of scheduled month-to-month expiry of the June month contracts. On Thursday, Nifty 50 may possibly trade in 15600-15800 variety, though 35,000 will stay an crucial 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 though trading trading Nifty and Bank Nifty on weekly expiry day, look for alternatives strikes that have highest OI in each Call and Put. “Never trade beyond those options strikes having highest open interest (OI) build-up,” Ajit Mishra, VP – Research, Religare Broking, told TheSpuzz Online.
On Nifty alternatives, maximum contact open interest was seen at 15,800 strike with 1.09 lakh contracts, followed by 15,900 strike with 87,205 contracts. Maximum place 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, though Put writing was seen at 15,550, then 15,600 level strikes. Call unwinding was at 16,000 and 16,150 strikes and place unwinding was seen at 15,800 and 15,000. For Bank Nifty alternatives, the highest open interest on the contact side in the weekly expiry is at 35,000, followed by 36,000 strike though the highest OI on the place side is at 34,000-33,500 strike.
Ajit Mishra, VP – Research, Religare Broking
Markets have been consolidating in a variety from the starting of the month, holding strongly above the 15,400 (the preceding record higher zone now acting as help). However, the momentum is missing largely due to the underperformance of the banking index which holds considerable weightage in the index. At the identical time, the contribution from the other sectors like IT, power, FMCG is assisting the index to sustain about the record highs. Today, on the month-to-month expiry day, we may possibly see the index to trade variety-bound initially on the other hand the tone may possibly alter in the latter half as we have Reliance AGM also scheduled. Keeping in thoughts, traders may possibly opt for the under method in Nifty and BankNifty for the day.
1. Sell Nifty 15700 Straddle
In this method, traders would sell each Call and Put of 15700 strikes of June 24 expiry which closed about 53 and 57 respectively so the total premium received would be 110. We advise keeping a quit loss at 160 for the target of 20.
2. Buy BankNifty on dips about 34,250 spot
Since we’ve various help in BankNifty about 34,250 spot levels, we may possibly see a rebound in the index if it comes closer to the zone through the day. It last closed at 34,574 levels so traders should really wait for the chance. They should really keep the quit loss at 33,900 levels for the target of 34700-34800 levels.
Sameet Chavan, Chief Technical Analyst, Angel Broking
The way industry has behaved in last couple of sessions, it is very particular that it is struggling at larger levels and it requires some strong trigger to go beyond record highs. On Wednesday, given that morning, contact writers had been very active and the outcome of this was clearly visible in the latter half, when we witnessed a sudden drop from 15750-15780 levels. For the month-to-month expiry, 15600-15800 is to be seen as trading variety. On Thursday, if any recovery has to occur, it will only be triggered by the intense oversold situation of the Place Get in touch with RATIO which is under 1 now. Hence, it is far better not to build fresh brief 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 month-to-month derivative expiry and also the weekly alternatives expiry, the Strikes of 15900 heavy contact writing of almost 2 million shares. NIFTY also saw unwinding of Get in touch with OI at 15700 and 15600 levels. This indicates that if the NIFTY stays under 15700, it may possibly see some more weakness. Right now, highest Place 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 previous this point tomorrow.
(The suggestions in this story are by the respective study analysts and brokerage firms. TheSpuzz Online does not bear any duty for their investment assistance. Capital markets investments are topic to guidelines and regulations. Please seek the advice of your investment advisor ahead of investing.)