F&O Tracker: Bearish signals from indices?

Akhil Nallamuthu |BL Research Bureau | Updated on: Apr 23, 2022

For Nifty Bank, the cumulative OI increased in 28.6 lakh contracts from 26 lakh contract in the previous week

The Nifty 50 and the Nifty Bank index were bearish last week. While the former lost 1.7 per cent to end the week at 17,172 the latter underperformed as it lost about 3.8 per cent to wrap up the week at 36,045. Notably, both the indices began the week with a gap-down. The difference was that there was a mid-week recovery in Nifty because of which it did not lose as much asNifty Bank.

The cumulative open interest (OI) of Nifty futures on the NSE were slightly down to 116.5 lakh contracts on Friday compared to 119 lakh contracts by the end of the preceding week. There was short build-up during the first half of the week but towards the end there seems to some short covering. The Put-Call ratio (PCR) of the Nifty week options (April 28 expiry) is at 0.74 meaning more call writing than put selling. Notably, 17500 strike call (17000-CE) and 18000-CE has OI of 1.2 and 2.1 lakh contracts. These are possible resistances if there is a recovery from here. On the other hand, 17000-PE has 1.2 lakh contracts outstanding, a possible support level.

For Nifty Bank, the cumulative OI increased in 28.6 lakh contracts from 26 lakh contract in the previous week. Thus, there seems to be good short build-up. 36500-CE and 37000-CE have the most outstanding OI with over 1.2 lakh contracts outstanding. These are potential resistance levels. Similarly, 36000-PE and 35000-PE can be supports with outstanding OI at 63,091 and 58,998 contracts, respectively.

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Published on April 23, 2022
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