F&O watch: Nifty trading range at 15,700-16,000, Bank Nifty positive; check Nifty strategy for weekly expiry

Financial institution Nifty choices knowledge indicated a right away buying and selling vary between 35,000 and 36,500 ranges.

By Rajesh Palviya

Within the Nifty present sequence, there was a Lengthy Construct Up witnessed with a rise in worth of 0.34% and a rise in OI by 1.10% until Wednesday whereby there was addition of 1.03 lakh shares in OI, rising from 93.23 lakh to 94.25 lakh shares. Nifty July rollover stands at 6.15% as on Wednesday. Nifty Put Name Ratio, a sentiment indicator utilized by merchants to gauge the market sentiment and temper, is presently at 1.25 in comparison with 1.12 of final week, indicating constructive bias.

India VIX, a market volatility indicator typically referred to as the concern gauge, is presently buying and selling 12.21% in comparison with 12.84% of final week. Implied Volatility of Nifty ATM choices for the present sequence is at 12.07% in distinction to 12.29% of final week, indicating low risky motion on both facet within the coming session.

Nifty Put choices OI distribution exhibits that 15,800 has highest OI focus adopted by 15,700 which can act as help for present expiry and on the Name entrance 16,000 adopted by 16,100 & 15,900 witnessed important OI focus and should act as resistance for present expiry.

In weekly choices there was Name writing seen at 16,000 strike adopted by 16,100 whereas on the Put facet noticeable exercise of writing was witnessed in 15,800, 15750 & 15,700 strike costs. Choices knowledge recommend a right away buying and selling vary between 15,700 and 16,000 ranges.

Nifty Open Curiosity Focus

Nifty OI Change

Financial institution Nifty Outlook

In present sequence there was a Lengthy Construct Up witnessed in Financial institution Nifty Futures with a lower in worth of two.47% and improve in OI by 6.73% until Wednesday; whereby there was addition of 1.25 lakh shares in OI, rising from 18.54 lakh to 19.79 lakh shares until Wednesday.. Financial institution Nifty July rollover stands at 5.37% as on 7 July 2021. Financial institution Nifty Put Name Ratio, a sentiment indicator utilized by merchants to gauge the market sentiment and temper, is presently at 1.27 in comparison with 0.75 of final week, indicating constructive bias with warning at greater ranges.

Financial institution Nifty Put choices OI distribution exhibits that 35,000 has highest OI focus adopted by 35,500 and 34,000 which can act as help for present expiry and on the Name entrance 36,000 adopted by 36,500 and 37,000 witnessed important OI focus and should act as resistance.

In weekly choices Name writing seen at 35,900, 36,000 and 36,500 strike whereas on the put facet it was seen at 35,000 and 35,500.Choices knowledge indicated a right away buying and selling vary between 35,000 and 36,500 ranges.

Banknifty OI Focus

Banknifty Possibility OI Change

Nifty technique for weekly expiry

Merchants can commerce with LIMITED RISK – UNLIMITED PROFIT STRATEGY by shopping for an At The Cash Name possibility with strike worth of 15900 @ 25 of weekly expiry; whereby this technique shall be worthwhile if Nifty closes above 15925 on expiry, whereas the utmost doable loss shall be restricted to Rs 1,875 (25 factors) which is the premium quantity paid by the dealer and the positive aspects could be limitless above the breakeven level of 15925.

The opposite technique with Bullish view and diminished premium outflow and decrease breakeven level is BULL CALL SPREAD whereby dealer will purchase one lot of 15850 name strike @ 50 and concurrently promote one lot of 15950 name strike @ 10, in order that web outflow or most loss shall be restricted to as much as Rs 3,000 (40 factors). If NIfty on expiry closes above 15890, the technique will begin making revenue, nonetheless as the chance is proscribed so is the revenue additionally restricted. The utmost positive aspects shall be restricted as much as Rs 4,500 (60 factors) solely as a result of the positive aspects of lengthy 15850 strike name shall be offset by the offered 15950 strike name, if Nifty closes above 15950 on expiry.

(Rajesh Palviya is Vice President– Analysis (Head Technical & Derivatives) at Axis Securities Restricted. The views expressed are the writer’s personal. Please seek the advice of your monetary advisor earlier than investing.)