Nifty expiry day strategy: Analysts flag key support, resistance levels

Analysts believe that significant Call Open Interest concentrated at 24,000, 24,100 and 24,200 Strikes suggests likely resistance around these levels.

The NSE Nifty has consolidated in the range of 23,100 - 24,200 in the month of June. For the June F&O series, as of date, the Nifty holds a slim 30-point gain compared to its close on May expiry day.  In recent trading sessions, the Nifty tested its crucial hurdle around 24,150 - 24,200 levels, shows the daily chart. However, on Monday, the index slipped back below the psychological 24,000-mark. 

 

  Analysts believe that today's June expiry day market action could evolve around these key levels on the Nifty.  Jatin Gedia, VP-technical research at Teji Mandi Investment Technologies notes that the Nifty has been trading in the range of 23,800–24,200 for the past ten trading sessions.  Ahead of (today's) June series monthly expiry, the analyst highlights that Nifty witnessed huge Call writing at the 24,000 Strike followed by 24,100 implying resistance in the 24,000 - 24,100 zone.  On the put side, Gedia says the index saw put writing at 23,800 and 23,700 Strikes. The Put Call Ratio fell from 1.02 to 0.77 suggesting higher call writing and thus a cautious sentiment.  CHECK Stock Market LIVE Updates    The analyst reckons that stock specific action will likely to continue, till the Nifty consolidates within 23,800 - 24,200 range.  Meanwhile, Dhupesh Dhameja, derivatives research analyst at SAMCO Securities flags that Nifty technical formed a bearish candle on Monday, and remains confined within its broader 23,850–24,200 trading range.  The analyst believes that a decisive move above the 24,150–24,200 zone is required to resume the recovery and pave the way towards 24,365. On the downside, Dhameja expects 23,850–23,900 to remain as the immediate support zone, followed by recent swing lows.  "A break below 23,850 could trigger fresh selling pressure towards the 23,700–23,600 zone," cautions the analyst from SAMCO Securities.  From the derivatives standpoint, Dhameja notes that while 24,000 continues to hold the highest Put Open Interest, a gradual shift in Put positioning towards the 23,500 strike suggests traders are lowering their support expectations.  On the upside, significant Call Open Interest is concentrated at 24,000, 24,100 and 24,200, highlighting these levels as immediate resistance zones for the current expiry, he adds.  Disclaimer: Views and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Reader's discretion is advised.