Weekly Expiry: Will Nifty hold 18,200 level at close today?

The weekly options data suggests that the Nifty may see limited upside on Thursday with resistance likely around 18,250 - 18,275 range.

NIFTY 

Bias: May see limited upside
Put-Call Ratio (PCR): 0.63

The Nifty 50 weekly contracts are entering the expiry day (Thursday) on a nervous note given the back-to-back losses in the last two trading sessions. 

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.

WEEKLY OPTIONS DATA

The Nifty weekly options OI PCR (Put-Call Ratio) stands at 0.63, indicating higher open positions in Calls versus Puts. In general, a PCR below 1 suggests that a higher percentage of traders are bullish, and anticipate an up move in the underlying index/ stock, thus they buy Calls.

However, the contrarian view suggests the savvy or the traders with bigger pockets write (Sell) Calls of higher Strike Prices, thus capping the upside for the underlying.

Among Nifty Calls, the highest OI is seen at 18,400 Strike Price followed by 18,300 and 18,200. More importantly, significant OI build-up was seen at 18,200 and 18,250 Calls in trade on Wednesday.

Based on the OI and price action, data suggests that the Nifty 50 may face resistance around 18,250 - 18,275 level in trades today. However, in case, the Nifty rallies and sustains above 18,300 level, a sharp short-covering rally cannot be ruled out.

On the other hand, the highest OI in Puts is seen at 18,000 Strike Price followed by 18,100 and 18,200. 

Thus, to conclude, the bias for Nifty 50 on Thursday seems to be of limited upside, with possibility of the index testing the 18,100 mark on the downside.

CHART CHECK

Technically, Nifty 50 seems to have hit resistance precisely at the Super Trend line on the weekly chart at 18,450 level. The index needs to clear this hurdle in order to resume the uptrend. On the flip side, failure to clear the hurdle could lead to consolidation or price correction in the near term. The weekly chart suggests that the Nifty may test 18,000-mark on the downside.

As per the daily chart, Nifty is seen heading towards the 20-DMA (Daily Moving Average) placed at 18,050-odd level. Break of the same, could extend the fall towards 17,925 - 17,775.

BANK NIFTY

PCR: 0.76

WEEKLY OPTIONS DATA

Similar, to the Nifty 50, Bank Nifty's weekly options OI PCR stands below 1, at 0.76. The highest OI in Calls stands at 44,000 Strike Price followed by 44,500 and 45,000. Significant addition in OI was seen at 43,800, 44,500 and 43,600 Calls.

Whereas in case of Puts, the higest OI stands at 43,500 followed by 42,000 and 43,000 marks. 

CHART CHECK

The Bank Nifty, too, tested its Super Trend line resistance on the weekly chart, which stands at 41,160, and then retraced. The index will need to conquer this hurdle on a closing basis for further up move.

On the downside, the Bank Nifty could correct to 42,000-mark in the short-term. The daily chart suggests near support for Bank Nifty at 43,135 in the form of its 20-DMA.