Weekly F&O Expiry: Nifty could gyrate between 18,475-18,575 on Thursday

Meanwhile, the Bank Nifty may face resistance around 44,300 - 44,350 zone today.

NIFTY

Bias: Range-bound trade likely

Put-Call Ratio (PCR): 0.83

On Wednesday, as the Nifty dipped 0.5 per cent the June futures contract saw a 7.3 per cent dip in open interest (OI), indicating likely profit- taking by traders as the index had galloped over 2 per cent in the preceding four trading sessions, with a sizeable OI.

Thursday expiry: Cues from Nifty options

Ahead of today's weekly expiry, the PCR (Put-Call Ratio) for the Nifty 01-June options expiry contract stands at 0.83, indicating a fairly mixed bias among traders. The total open interest (OI) for Nifty 01-June Calls is around 24.56 lakh, while the Nifty Puts OI stands around 20.60 lakh.

Among Calls, the highest open interest is seen at 18,600 Strike Price followed by 18,700 and 19,000. Yesterday, notable OI build-up was seen at 18,600 and 18,500 Calls. The price-to-OI data suggests that the NSE Nifty 50 may face resistance around 18,580 - 18,610 on Thursday. Whereas sustained trade above 18,610, could trigger a short-covering rally.

On the other hand, the highest OI among Nifty 01-June Puts stands at 18,500 Strike Price followed by 18,300 and 18,400. On Wednesday, the 18,600 and 18,650 Puts saw significant unwinding of positions as the Nifty dipped sharply below it.

At the same, the overall OI at 18,500 Put is significant higher (2.18 lakh contracts) when compared to that of 18,500 Call (1.58 lakh contracts), however, the OI build-up in trades on Wednesday at this Strike Price is more-than-double for the Call v/s the Put.

This suggests that there is likely to be a stiff tug-of-war between the bulls and the bears to gain control of the 18,500 level. The Nifty could gyrate in the range of 18,475 - 18,575 for a major part of the trading day.

Senior derivatives & technical research analyst, Nandish Shah of HDFC Securities, recommends to Buy Nifty 18,500 Call option with a stop loss of Rs 25, for an upside target of Rs 85. The analyst suggests to buy the Call as and when Nifty 50 comes near the 18,520 level. 

According to Angel One, the zone of 18,450 – 18,400 is a strong support area for the Nifty, while the immediate resistance is expected in the range of 18,650 – 18,730 levels. Traders should keep an eye on these levels and trade accordingly for the weekly expiry session.

BANK NIFTY

Bias: Resistance likely around 44,350

PCR: 0.77

The Bank Nifty has hit a new all-time high in recent trading sessions, and seems to have conquered the 44,000-mark after days of struggle. 

Thursday expiry: Cues from Bank Nifty options

Based on the options data, traders seem to be adamant to hold the 44,000-mark at close today. The weekly Bank Nifty PCR seems neutral at 0.77.

The highest OI among Bank Nifty 01-June Calls is seen at 45,000 Strike Price followed by 44,400 and 44,200. The 44,200 Call saw a sizeable build-up of OI on Wednesday, thus indicating likely resistance for the index around 44,300 - 44,350 levels. On the upside, sustained trade above 44,450 can trigger a sharp short-covering rally on the underlying index.

On the other hand, highest OI among 01-June Bank Nifty Puts is seen at 43,500 followed by 44,000 and 43,000. The 44,500 Put saw huge unwinding of positions given the sharp intra-day fall on Wednesday. The Puts have not seen sizable OI build-up at any Strike Prices, which indicates lack of conviction among Put writers in the current scenario.