F&O expiry outlook: Bank Nifty support at 36000, volatility in Nifty on cards; follow stock-centric approach

2023-11-03

By Sameet Chavan

As we alluded to in our previous commentary, post the stellar run in the week the market could take some breather, which was quite evident in Thursday’s session. However, the sustainability of the current zone could be perceived as a constructive setup from a short to medium-term perspective, wherein the undertone is likely to remain in favor of the bulls. The technical setup for NSE Nifty 50 index construes the formation of higher highs and higher bottoms, with the immediate support of the recent unfilled gap coinciding with 61.80 percent of the retracement of the fall placed at the 17327 level, which is expected to act as a firm demand zone. On the contrary, 17650 is the immediate hurdle, followed by the previous swing of 17800 odd levels.

Going ahead, more action is likely to be seen in the thematic stocks, and hence a pragmatic approach would be required in the current scenario. Looking at the recent development, any minor dip towards the mentioned support could be utilized by bulls, while better opportunities would be seen in a stock-centric approach.

Taking a glance at the F&O data, we observed decent correction to touch 15700 in the beginning of March series. Surprisingly, shorts were missing in this correction which was followed by decent longs when market rebounded to conclude the series around 17500 mark. Rollover for Nifty and Bank Nifty stood at 82% and 91%. We had a very strong rollovers and considering the price action it seems majority of the positions are on long side which has been rolled too. In options front, 17500 strike of both call and put has highest build-up for the coming weekly series, which is rare but this suggest some volatility on cards now.

(Sameet Chavan is a Chief Analyst-Technical and Derivatives at Angel One. Views expressed are the author’s own. Please consult your financial advisor before investing.)

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