Indian benchmark indices are trading lower, weighed down by negative global cues. At noon, Nifty was down 139.50 points, or 0.55 percent, at 25,140.30.
Experts suggest that, considering the gap-down opening, the zone of 25,100-25,080 is likely to act as immediate support for the index. If the index slips below the 25,080 level, the next support is positioned at the 25,000-24,980 range.
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 shows the highest put writing at 25,000, with 24,900 levels acting as a crucial support zone. According to Tejas Shah, Vice President of Technical Research at JM Financial, "The short-term moving averages are below the price action and should continue to support the indices on any decline. Supports for the Nifty are now seen at 25,000 and 24,950 levels. On the upside, immediate resistance for Nifty is at 25,300-25,325 levels, with the next crucial resistance zone at 25,450-25,500 levels."
Bank Nifty
On expiry day, Bank Nifty is trading down 250 points, or 0.50 percent, at 51,450 at noon. The 51,500 call option (with 13 lakh OI) is showing strong resistance, while support is at 51,300 (with 10.4 lakh OI).
According to Akshay Bhagtwat, Vice President of Derivative Research at JM Financial, "51,250 support level has held for Bank Nifty (BN) up to noon. As advised in the morning update, caution was suggested if the 51,250 level breaks.
"Based on current options data, it appears to be a range-bound expiry between 51,250 and 51,550 for the spot Bank Nifty. For any significant momentum to emerge, either end of this range (51,250-51,550) needs to be breached to shake out the option writers. Overall, the intraday trading view remains positive as long as the 51,250 level holds, " added Bhagwat.
Preeti K Chabra, Founder of Trade Delta, stated, "With today's gap-down, the market appears paused. The market looks poised for an upside as Bank Nifty seems strong. As long as Nifty’s low for today is not broken, position yourself long in the market."
The ITM premiums are very low, with no premiums in the ITM CE or PE sides, suggesting that momentum could be missing. A recommended strategy is:
Strategy by Chabra:
Weekly short 25,200 CE (September 12)
Weekly short 25,400 CE (September 12)
Long monthly 25,000 CE (September)
Net Debit: 430 - 62 - 140
Outflow: 225
Breakeven Point: 25,228
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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