Will Nifty follow same trend of last three expiries?
Commentary:The Nifty violated its major support for the week of 17900. Today, we saw an extension of profit booking as the index fell by another 200 points. Advance decline ratio for F&O stocks was at only 11 positive stocks vs. 180 negatives. The worth sector since morning were media and metals, which are down almost 3% followed by auto, which was down 2.5%.
Major Option activity (Weekly):
Major Call OI change in today’s session: 17800 (61.7 lakh), 17900 (29.7 lakh) and 18000 (23.3 lakh).
Major Put OI change in today’s session: 17700 (17.2 lakh) and 17600 (27.6 lakh).
Outlook:Today again we saw aggressive Call writing happening in little OTM strikes along with selling in most heavyweights. The Bank Nifty continued to underperform as since last Thursday, it fell over 1100 points whereas the Nifty fell 220 points. However, despite the 200-point fall, no major unwinding was seen in 17700 and 17600 strike Puts. Since the last three expiries, the Nifty has settled in the range of 17800-17900. If this time the same thing happens then we may see a recovery of at least 120-150 points in the second half. We may see limited downsides from current levels as the Nifty should find support near 17700-17650. Hence, from current levels of 17720, it is advisable to avoid aggressive short for weekly expiry.