Weekly F&O Expiration: How to trade Nifty, Bank Nifty on expiration day? Trade setup, likely trading range, outlook

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Bank Nifty has fallen nearly 2% so far this week and closed at 34,415.45 on Tuesday

On the weekly F&O expiration day, Nifty is expected to experience a positive open and trade in a range of 15,550 to 15,750. The level of 34,400 will be a significant level in Bank Nifty on Thursday, and the overall trading range is expected to close. range between 34,000 and 35,000, analysts said. The Nifty 50 Index has lost 1.5% in the past two days, and in intraday trading on Tuesday it broke off the support level of 15,600, however, recovering from lows it closed at 15 632. Bank Nifty has fallen nearly 2% so far this week and closed at 34,415.45 on Tuesday. Prior to the weekly options expiration, Indian stock markets remained closed on Wednesday, due to Eid al-Adha. India’s VIX, the volatility gauge, climbed 4.14% to 13.21 on Tuesday.

On Nifty options, the maximum Call OI is 15,800 strike price with 78,095 contracts, followed by 15,700 strike price. While the maximum OI Put is 15,500, followed by 15,600. Call writing was seen at 15,700 and 15,650 strikes, while put writing was seen at 15,500, then 15,400 level strikes. Call settlement was 16,500 and 16,000 strikes and puts unwinding was observed at 15,700. For Bank Nifty options, the highest open interest on the call side at weekly expiration is 36,000, followed by 37,000 strikes; while the highest OI on the put side is at 33,500-34,500 strike.

Rajesh Palviya, Vice President – Research (Technical and Derivatives Manager), Axis Securities

Nifty witnessed a Short Build Up with a price drop of -0.73% and an increase in OI of 3.71 lakh shares on Tuesday, while in Bank Nifty there was also a Short Build Up with a price drop of -1.94% and an OI addition of 1.77 lakh shares. The PC Ratio (Nifty) sentiment indicator is currently trading at 0.81, well below the midline, indicating a neutral to positive bias. The highest OI on the CALL side in the weekly expiration scheduled for July 22, 2021 is at 15,800 and 15,700 strikes where the writing of 39.67 lakh shares was observed at 15,700 strike and 17.91 lakh shares Writing was seen at 15,650 strike indicating a strong area of ​​resistance at 15,700, while on the PUT side the highest OI is 15,500 and 15,600 strikes; where the writing of 6.41 lakh and 6.56 lakh stocks was seen at 15,500 and 15,400 keystrokes, respectively, indicating a strong area of ​​support. So the most likely range for the weekly expiration is probably between 15,750 and 15,550

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In Bank Nifty, the highest OI on the CALL side at weekly expiration is at 36,000, 35,000 and 35,500 strikes; while on the PUT side the highest OI is at 33,500, 34,500 and 34,000 strikes, with 34,400 acting as the pivot level for this weekly expiration as there has been an addition of 3.11 lakh shares on the CALL side and 1.75 lakh on the PUT side, suggesting that any holding movement on either side of this level will decide the trend of Bank Nifty. While on the writing front, 34,500, 34,600 and 34,700 strike calls saw the writing of 14.22 lakh, 7.68 lakh and 7.34 lakh shares, respectively, followed by 33,500 and 34,100 put writes. , indicating a strong support zone; the overall range for Bank Nifty is expected to be between 35,000 and 34,000.

Sameet Chavan, Chief Analyst – Technical and Derivatives, Angel Broking

After a weak start, the indices corrected strongly and this continued on Tuesday as well. The banking space was the main culprit in the decline in benchmarks, coupled with overall sentiment. Indeed, short training courses were also observed in Bank Nifty in the derivatives segment. FIIs aggressively sold stocks in the cash segment and also closed out long positions in the index futures segment.

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In the options segment, call sellers were quite active and sold 15,700 to 15,900 calls. The highest open interest in the weekly series is placed at 15,800 calls and 15,500 puts. The Nifty PCR-OI dipped below 1 indicating that the market is approaching the oversold zone. India VIX also edged up from multi-year lows, but still not that high to worry about. Much will depend on the evolution of the world market as we have public holidays before the weekly expiration.

Traders are advised to avoid aggressive positions for this weekly expiration, but one can look for a contra trade and buy a monthly expiration call option if Nifty enters the 15,500-15,450 support area. Bank Nifty, that support zone is between 34,200 and 33,900, where some punts can be taken.

Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst and Founder, Gemstone Equity Research & Advisory Services

Markets will head to weekly options expiration with a weaker configuration. Tuesday saw a strong 15,700 call write which also resulted in some Puts unwinding. However, 15,800 still have the highest OI call concentration on a fence basis. Nifty may see a positive open and witness some technical pullback, however, it will face strong resistance in the 15,700-15,800 area. On the underside it has support at 15,500.

Bank Nifty also recorded high calls at 34,500 levels. Unless, if there is a pullback and Bank Nifty opens above that point, it may face some difficulty at that level. However, the maximum Call OI concentration on Bank Nifty is 35,000, which is a major point of resistance even if a technical pullback occurs. On the lower side, it has support at 34,000 levels considering the PUT OI as seen in the weekly options data.

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Shrikant Chouhan, Executive Vice President, Technical Equity Research, Kotak Securities

The huge call entry is aligned between 15700 and 15800, however, the sell entry is aligned with 15600 and 15500. If we consider the PCR, then it is at the lower expiration levels, which is an indication of oversold activity.

The strategy

In the event that the market opens around 15550, then it would be advisable to buy call options for the 15,500 strike between Rs 170-180. Keep a final stop loss at Rs 100 for the target of Rs 270-300. Buying put options is advisable if the Nifty opens higher around 15,750 levels.

Buying call options is advised, however, for this we need an open or intraday test of Bank Nifty at the 34,200-34,100 levels (depending on the spot base). Buy 34,000 strike calls between Rs 250-300 levels with a stop loss at Rs 100. In case Bank Nifty opens higher then we should be the buyer of the strike puts 35,000. However, for this we need a Nifty Bank opening around 34,700.

(The recommendations in this article are from the respective research analysts and brokerage firms. UK Time News Online assumes no responsibility for their investment advice. Investments in capital markets are subject to rules and regulations. Please consult your investment advisor before investing.)

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