Friday, May 18, 2018

F&O: Put unwinding at all strikes paving way for further fall in Nifty

The Nifty50 index opened flat on Friday and continued its losing streak for the fourth consecutive session. It formed a Bearish Candle on a daily scale and a Bearish Engulfing Candle on the weekly scale, which indicated dominance by the bears. 

The index finally negated the formation of higher lows on the weekly scale after seven weeks. Now, till it holds below 10,680, weakness could take Nifty towards its next support at 10,550, while on the upside, hurdles are seen at 10,680 and 10,725 levels.

On the options front, maximum Put OI was at 10,500 followed by 10,600 while maximum Call OI was at 11,000 followed by 10,800. Meaningful Call writing was seen at 10,600 followed by 10,700, which is restricting Nifty’s upside momentum while Put unwinding at all immediate strike prices is creating scope for further decline. Options data suggested an immediate trading range between 10,550 and 10,700 levels. 

India VIX moved up 5.54 per cent to 14.15. 

Bank Nifty opened in the and witnessed selling pressure throughout the session. It has been forming lower highs and lower lows on the daily scale from last four sessions. 

It formed a Bearish Candle on the daily scale, indicating that the bears are having a grip on the market. As long as Nifty sustains below 26,100, weakness could be seen towards 25,750 and 25,500 levels, while on the upside, hurdle is seen at 26,250 level. 

Nifty futures closed in the negative at 10,608 with a loss of 0.82 per cent. Long buildup was seen in select FMCG and private bank stocks while major shorts were seen in PSU banks, pharma and most midcap stocks. 


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