By Ravi Singh
The benchmark indices are currently navigating a volatile phase, with no fresh long positions advised unless the Nifty sustains above the 24,550 level. As of now, the highest open interest for the monthly expiry is positioned at the 23,000 Put and 26,000 Call strikes, while for the weekly expiry, the highest OI is concentrated at the 25,000 Call strike. This structure suggests a likely continuation of a sideways to negative market trend in the near term. Sustained bullish momentum is contingent upon the Nifty closing decisively above the 24,550 mark.
From a flow perspective, FIIs have remained net sellers in the cash segment, having offloaded more than Rs 28,000 crore in November so far. This could indicate a more cautious or risk-off sentiment, potentially weighing on broader market sentiment and adding to the underlying caution in the market.
Turning to Bank Nifty, futures experienced a volatile session, ultimately closing nearly flat. This was accompanied by a 15.20% increase in open interest on Tuesday compared to the previous series. For the monthly expiry, the maximum open interest is concentrated at the 55,000 Call and 55,000 Put strikes, followed by the 52,000 Call and 52,000 Put strikes. This highlights the significance of the 52,000 level in the near term. Notably, the 52,000 mark could prove to be a pivotal level for Bank Nifty in the November series, serving as a key make-or-break point for the index’s near-term direction.
Key Levels to Watch:
For the Nifty, as long as the index trades below the 24,650-24,550 range on a spot basis, the bias remains “SELL ON RISE” for the weekly expiry of the November series. We expect significant resistance in the 24,650-24,550 zone, while immediate support is likely around the 23,750-23600 levels. Consequently, the trading range for Nifty during the November series is expected to be between 23,550 and 24,550.
For Bank Nifty, key support levels are seen around the 51,000-50,800 range. We anticipate the index to trade within the 50,000-52,400 range during the November series. However, a long position may be considered if Bank Nifty sustains above the 51,800 level for a few sessions, indicating a potential shift in momentum.
Strategy for the week: Nifty Put Spread
Buy Nifty Put 23850 @ 110
Sell Nifty Call 23650 @ 40
Spread 70 stoploss 10 target 160 (EXP 14 NOV)
(Disclaimer: Ravi Singh is the Senior Vice President of Retail Research at Religare Broking Limited.
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