Navigating expiry| Bank nifty trades negative; Use the dip as buying opportunity advise analyst

At 12:34 hrs IST, the Sensex was up 166.16 points or 0.22 percent at 74,119.47, and the Nifty was up 45.30 points or 0.20 percent at 22,574.30.

Bank Nifty was under selling pressure on May 22, the day of the weekly options expiry, falling as much as 0.7 percent to 47,700 points in the afternoon. However, analysts are moderately bullish on the banking index at this level, suggesting to buy for moderate upside.

Earlier during the day, the Bank Nifty climbed to an intraday high of 48,114 and fell to an intraday low of 47,633.

Expiry View

“Bank Nifty is currently trading at 47,665 according to spot levels. With the weekly expiry in focus, we can expect volatile movements on both sides. From a trading perspective, we expect the market to stay well above the major support level of 47,400 and below its major resistance level of 48,000,” said Riyank Arora, Technical Analyst at Mehta Equities.

The highest OI at 48,000 indicates that this level should serve as the most significant hurdle for the day, said Arora.

Overall, he expects the market to stay within a broader range of 47,400 - 48,000 for today's weekly expiry.

Also read: F&O Manual| Indices trade sideways; Nifty faces immediate resistance at 22,500

Next Week's Expiry Trade Positioning

Bank Nifty has seen a decrease in Open Interest of 2.2 percent with an increase in price of 0.51 percent indicating short covering.

Axis Securities has a moderately bullish view for Bank Nifty for next week. "Traders could initiate a spread strategy to make modest returns with limited risk and reward. The suggested spread consists of buying one lot of the 48,100 strike CALL Option and simultaneously selling one lot of the 48,600 strike CALL Option," said the brokerage firm.

Bank Nifty strategy for May 29, 2024 expiry by Axis Securities:

Buy: Bank Nifty 48,100 call option in the range of Rs 475 - 445

Sell: Bank Nifty 48,600 call option in the range of Rs 255 - 285

Break-even point: 48,290

Risk: Rs -2,850, per lot

Reward: Rs 4,650, per lot

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