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Aggressive Put writing in 18000 strike

Commentary:For a major part of the last week, the Nifty remained in a range whereas last Friday sharp reversals helped the index to end at a weekly high levels and well above its sizeable Call base of 18000. Few heavyweights supported the index whereas money inflow was observed in technology and pharma space. Going ahead, fresh buying interest should emerge from these sectors.

Major Option activity (Weekly):

Major Call OI change in today’s session: 18000 (-7.6 lakh), 18200 (33.6 lakh) and 18300 (16.6 lakh).

Major Put OI change in today’s session: 18100 (12.9 lakh) and 18000 (3.3 lakh).

Outlook:The Nifty started the current expiry with huge Call OI base whereas last Friday we saw huge option writing block in 18000 strike Put, which remains the key support area now for upsides to continue. As the index moved higher we saw closures happening in ATM and OTM strike Calls. Now the highest OI base is almost same in 18200 and 18300 strike Calls. The Bank Nifty is relatively weak and fresh upsides are expected only once it closes above 39500 levels. However, here we feel stocks like Reliance Industries, HDFC, L&T and few from pharma and technology space should help the Nifty to test 18300 levels on upsides.