Options data holds wider range with bullish bias

Scattered OI Spread

• High Call OI at 21,000
• High Put OI at 20,000
• India VIX fell 1.60% to 12.47 level
• PCR OI at 1.54
• Call OI concentration hovering in 21,900-21,300 range

The 21,000CE has highest Call OI followed by 21,500/ 22,000/ 21,600/ 20,900/ 21,200/ 21,900/ 21,400/ 21,200 strikes, while 22,000/ 21,600/ 21,500/ 21,950/ 21,000/ 21,300 strikes. Coming to the Put side, maximum Put OI is seen at 20,000 followed by 20,900/ 20,800/ 20,700/ 20,600/ 20,200/ 20,100/ 20,300 strikes. Further, 20,500/ 20,300/ 20,800/ 20,900/ 20,000 strikes recorded reasonable addition of Put OI.

Dhirender Singh Bisht, associate vice-president (technical research-equity) at SMC Global Securities Ltd, said: “From the derivatives front, Call writers were seen adding Open Interest at 21,000 strike, while Put writers remained active at 20,950, 20900 & 20,800 strikes. Going forward, Nifty could find some resistance at its key psychological level of 21,000points, while any fresh momentum above that could once again trigger a fresh round of momentum, which can move Nifty towards 21,300 level as well. On downside now 20,800-20,700 zone would act as a strong support for the index and we advise traders to remain on bullish side and use every dip to create fresh longs.”

After this up move, market participants were aggressively writing the Put strikes, which indicates limited downsides in the market, according to ICICIdirect.com.

“In the week gone by, both Nifty and Bank Nifty indices managed to close at their record highs with whooping gains of more than 3.5 per cent and 5.45 per cent respectively. The market recorded its biggest weekly gains since July 2022 as the Reserve Bank of India left the key interest rate unchanged for the fifth time in a row. Nifty indices gained for the sixth consecutive week, while the banking index also closed higher for the third straight week,” added Bisht.

BSE Sensex closed the week ended December 8, 2023, at 69,825.60, a net recovery of 2,341.41 points or 3.46 per cent, from the previous week’s (December 1) closing of 67,481.19 points. During the week, NSE Nifty advanced 701.50 points or 3.46 per cent to 20,969.40 points from 20,267.90 points a week ago.

Bisht forecasts: “Technically both the indices are maintaining their bullish momentum as buying has been observed on every dip on the back of fresh inflows.”

India VIX fell 1.60 per cent to 12.47 level.

Implied Volatility for Nifty’s Call options settled at 10.37 per cent, while Put options concluded at 11.25 per cent. The India VIX, a key indicator of market volatility, concluded the week above 12.50 per cent. The Put-Call Ratio of Open Interest (PCR OI) stood at 1.54 for the week.

The market recovery was triggered by short covering as FIIs net shorts declined to 47,000 contracts from over 1,80,000 contracts in the first half of November. FII net longs in stock futures rose to 1,34,000 contracts from 90,000 contracts.

Bank Nifty

NSE’s banking index closed the week at 47,262 points, higher by 2,447.80 points or 5.46 per cent from the previous week’s closing of 44,814.20 points.

Data from ICICIdirect.com, indicates that options concentration in Bank Nifty is at ATM 45,000 Call and 44,500 Put strikes. Due to the sharp up move seen in last week, Put writers are very active, they have shorted aggressively between the strike of 44500 to 45000. As it is trading above 44500 levels, the covering move may continue in the banking index till it is holding above 44500 levels.