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Nifty seems to be in no mood to recover but its near its support of 18000

Commentary:Volatility remained extremely high in the expiry week. The Nifty witnessed a zig-zag move and returned to its volume weighted average price (VWAP) for the October series. Bank Nifty rollovers were marginally lower. Hence, some actions in the banking space are expected in the second half. However, volatility index – India VIX rose 7% and moved towards 18%, which generally does not move such sharply on expiry day. Among sectoral indices, chemicals and metals again witnessed a round of selling whereas supportive actions were there in cements, pharma and select FMCG stocks.

 

Major Option activity (Weekly):

Major Call OI change in today’s session: 18000 (20.1 lakh), 18100 (70.2 lakh) and 18200 (35.7 lakh).

Major Put OI change in today’s session: 18000 (21.2 lakh) and 17900 (20.1 lakh).

 

Outlook:As the Nifty reverted from 18350, aggressive OI additions were seen in Calls. For instance, today we saw almost 70 lakh shares being added to 18100 strike Call, which remains a hurdle on upsides. The Nifty is trading near its highest Put base of 18000. Hence, it may see a bounce from current levels. However, it seems bears are in command in today’s session and on upsides, fresh supply should be visible near 18100-18150. Volatility is likely to be high due to the expiry activity in the second half. Until we do not see any meaningful closures in 18100 strike Calls, one should remain negative on the market.