Shubham Agarwal
It was another week of massive selling across all the sectors, except IT, and we have seen vertical crash in the Nifty from 17,600 to 17,000. The index has support levels at 17,000—1,6850.
On the OI (Open Interest) front, short build-up was witnessed in the Nifty over the week gone, while it shut shop with the gain of significant loss of 3 percent at 17,024.5.
Bank Nifty was unable to sustain above 37,500 and closed around 35,800 with a loss of around 3.88 percent last week and traded between 35,642 and 37,717. On the OI front, short build-up was witnessed in Bank Nifty over the week gone.
Further diving into the Nifty, upcoming weekly expiry Call writers showed aggressions by building more position compared to Put writers.
Looking at the Bank Nifty upcoming weekly expiry data, on the upper side, immediate resistance stands at 36,000(15L share) followed by 37,000 (19L shares).
India VIX, fear gauge, increased marginally by 2 percent from 16.06 to 16.38 over the week. India VIX trades near the lowest level of pre-COVID crash. Cool off in the IV has given relaxation to market. Further, any downticks in India VIX can push upwards momentum in the Nifty.
Looking at the sentimental indicator, Nifty OI PCR for the week has decreased from 1.282 to 0.809 and Bank Nifty OIPCR over the week decreased from 0.911 to 0.547, compared to last Friday. Overall data indicates more of CE writers over Put writers in the Nifty.
Moving further to the weekly contribution of sectors to the Nifty, most of the sectoral indices have negatively contributed. Private bank, NBFC, OIL and FMCG stocks have collectively contributed nearly 470 points in the Nifty’s 535-point loss, whereas only IT stocks stayed in the green, contributing around 70 points on the positive side.
Looking towards the top gainers and losers of the month in the F&O segment, Persistent Systems topped by gaining over 7.5 percent, followed by Larsen & Toubro Infotech at 5 percent and Wipro at 14.30 percent. Whereas, Shriram Transport Finance Corporation has lost over 15.6 percent, Idia 13.7 percent and IEX 12,7 percent over the week.
Considering the bearish momentum along, the upcoming week can be approached with a low-risk strategy like Modified Put butterfly in the Nifty.
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