November expiry week expected to be gloomy
Commentary:Major indices continued to remain under pressure as the Nifty did not manage to close positive for a single day while major sectors fell almost 3%. Cash based selling by FIIs intensified. Last Friday they sold approximately Rs.3500 crore in cash, which is the highest since October 29, 2021.
Major Option activity (Weekly):
Major Call OI change in today’s session: 17800 (47.2 lakh), 17700 (39.8 lakh) and 17600 (36.4 lakh).
Major Put OI change in today’s session: 17500 (13.4 lakh) and 17400 (7.8 lakh).
Outlook:Throughout the November series, the Nifty failed to sustain above its last month VWAP of 18100 while bounce in the index was utilised to create fresh shorting in Calls. Last week aggressive Call writing was observed from 17800 to 18100 strikes whereas current week positions shifted to 17700-17800 strikes indicating limited upsides. Laggards like the Bank Nifty closed below its sizeable Put base of 38000, which should escalate selling in coming days. We feel stock specific actions would be there due to a pick-up in rollover activity. However, in terms of resistance, we feel the Nifty is unlikely to sustain above 17800 and the Bank Nifty above 38200. Hence, we expect a gloomy November series expiry. It is advisable to remain short on rise and utilise the higher volatility by writing OTM strike Calls.