The Nifty 50 (17,102) and the Nifty Bank (36,088) ended last week on a flat note. While the former lost 0.4 per cent, the latter was up by a marginal 0.1 per cent. Both the indices have largely been non-directional since past two weeks, oscillating within a range. This seems to have led to a decline in trading activity. That is, the cumulative open interest (OI) of Nifty 50 and Nifty Bank dropped last.

The outstanding cumulative OI of Nifty futures on the NSE dropped to nearly 107 lakh contracts on Friday compared to 117 lakh contracts by the end of the preceding week. Comparatively, Nifty Bank futures has seen a marginal fall in its cumulative OI i.e., it stood at 27.9 lakh contract on Friday as against 28.6 lakh contracts a week back.

That said, the Put-Call ratio (PCR) of Nifty 50 options (May 5 expiry) have come down to 0.70 on Friday compared to 0.9 by the end of previous week. So, participants have written more call options than put options, indicating a lower expectation of a rally. 17300 and 18000-strike call options, with about 1 and 1.2 lakh contracts respectively, can be considerable barriers on the upside.

The PCR of Nifty Bank options (May 5 expiry) slightly dropped to 0.57 last week from 0.6 a week back. Yet, like the Nifty 50, call selling is higher than put selling, showing a bearish bias. Notable strike prices are 37000 and 36500 calls with 91,218 and 75,540 contracts respectively as outstanding contracts. These are potential resistance levels.

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