Nifty May F&O expiry: Index may break 18,200, faces resistance at 18,350

Meanwhile, the Bank Nifty may witness a sharp fall if the index fails to sustain above 43,500 level.

NIFTY 

Bias: Neutral

Put-Call Ratio (PCR): 0.87

Despite the sharp volatility in the last two weeks, the NSE Nifty 50 index continues to hold a 2 per cent gain for the May series. 

The NSE Nifty 50 benchmark index slipped 1.2 per cent in the last two days, whereas the overall open interest (OI) in the May futures contract declined by nearly 10 per cent. This indicates, likely unwinding of long positions on the Nifty May futures.

Cues from Nifty options

Ahead of today's monthly expiry, the Nifty May series options PCR (Put-Call Ratio) stands at 0.87, indicating a fairly mixed bias among traders. The total open interest (OI) for Nifty May Calls is around 25.55 lakh, while the Nifty Puts OI stands around 22.24 lakh.

Among Calls, the highest open interest is seen at 18,400 Strike Price followed by 18,500 and 18,300. Notable OI build-up was seen at 18,350, 18,400 and 18,300 Calls on Wednesday.

Based on the data, it seems likely that the Nifty may face considerable resistance around 18,350 - 18,370 on Thursday. 

On the other hand, the highest OI among Nifty May Puts stands at 18,200 Strike Price followed by 18,300 and 18,100. The 18,300 Puts saw some unwinding of positions after the Nifty 50 benchmark slipped below the 18,300 mark.

Most of the Nifty Out of the Money (OTM) also witnessed unwinding; whereas some build-up was seen in 18,250 and 18,200 Puts. Based on the same, the key support for Nifty 50 seems to be around 18,175 level. Sustained trade below the same could accentuate the downside to 18,100-odd level.

Chart check

Technically, the Nifty 50 is looking to seek support around its 20-DMA (Daily Moving Average) at 18,200-level, even as the select key momentum oscillators have witnessed a negative crossover. As long as the Nifty holds the 18,200-level, bulls would remain hopeful.

On the flip side, in case, the Nifty drifts and sustains below the 18,200-level, the index could slide towards the next key support levels placed at 17,930 and 17,800.

BANK NIFTY

Bias: Negative

PCR: 0.71

The Bank Nifty is up 1.5 per cent so far for the May series expiry. In the last eight trading sessions, the banking index found it difficult to sustain above the 44,000-mark.

Cues from Bank Nifty options

Based on the options data, the Bank Nifty seems slightly weaker compared to the benchmark Nifty 50. Bank Nifty's PCR stands at 0.71, indicating higher open positions in Calls versus Puts.

The highest OI among Bank Nifty May Calls is seen at 44,000 Strike Price followed by 45,000 and 44,500. More importantly, the 43,800 and 43,900 Calls saw significant build-up of OI in trades on Thursday. Thus indicating, that the Bank Nifty is expected to face considerable resistance around 43,900 - 43,950 on Thursday.

On the other hand, highest OI among Puts is seen at 43,500 followed by 43,000 and 42,000. Some OI build-up was seen at 43,500 Put, thus indicating possible support around 43,450 level.

Chart check

Technically, the Bank Nifty seems to be on the verge of testing its 20-DMA support at 43,500. Break and sustained trade of the same could trigger a sharp fall towards 42,700 level, indicates the daily chart.

Among the key momentum oscillators, the MACD and the Slow Stochastic are clearing in favour of the bears.