Bank Nifty jumps to record high; fresh put writing in 52,800-53,000 strikes imply strong support zone for today's expiry

At 11:20 hrs IST, the Sensex was up 477.20 points or 0.60 percent at 79,918.65

Indian benchmark indices surged today as banking heavyweight HDFC Bank rose by 3 percent. This increase comes amid development that HDFC Bank's weight in the MSCI EM Index, currently around 3.8 percent, could jump to 7.2-7.5 percent following the index's rebalancing in August.

At 11:20 am, the Bank Nifty was trading around 53,022, up 850 points or 1.66 percent on expiry day, while the Nifty was up 143.20 points or 0.59 percent at 24,267.00. About 2154 shares advanced, 1146 shares declined, and 89 shares unchanged.

Bars in red indicate the change in open interest (OI) of call writers, while the green bars show the change in OI of put writers

Options data suggests heavy put writing at 53,000, followed by 52,800 and 52,500 levels acting as strong support. According to Sudeep Shah, DVP and Head of Technical and Derivative Research at SBI Securities, "Call unwinding from 52,700-53,000 strikes and fresh put writing in 52,800-53,000 strikes imply support for the Banking Index."

Shah notes that as long as 52,700-52,800 holds, we could witness an acceleration of the current upmove in Bank Nifty up to 53,450-53,700.

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Arun Kumar Mantri, Founder of Mantri Finmart, believes that Bank Nifty is on the verge of a breakout on the daily charts and looks strong to extend gains towards 53,400 in today's trade. "The overall trend of the index seems to be bullish as long as it holds above 52,800 on a closing basis on the technical charts," said Mantri.

Call writers trapped at 53000 CE strike 

Mantri further believes that call writers of the 53,000 CE strike are trapped after today's move on the higher side, and any further upward move may trigger a fresh round of short covering in the index.

Expiry strategy recommended by Mantri

Expiry Strategy in Bank Nifty: Buy one lot of Bank Nifty 53,100 CE at Rs 110 and sell 53,400 CE at Rs 34.

Break even point: Rs 76,

Stop loss: Rs 50 (Premium),

Max Profit: Rs 3,345, Max Loss: Rs 1,155

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