F&O Manual |Nifty trades lower amid expiry volatility, resistance at 19,400

Indian benchmark indices started the day on a positive note but failed to hold on to the gain as the day progressed, as August expiry triggered volatility. Weak global cues triggered by China’s economic health, too, weighed on sentiment.

At 1 pm, the Sensex was down 67.84 points or 0.10 percent at 65,019.41 and the Nifty was down 36.30 points or 0.19 percent at 19,311.20. About 1,672 shares advanced, 1,387 declined and 97 were unchanged.

The options data suggests call writers were dominant, with heavy call writing at 19,350 and 19,400. Analysts said despite a positive initial start, prices were struggling to maintain the upward trajectory and were expected to return within the recent trading range and continue with the choppy phase.

According to ICICI Securities,  “The Nifty is expected to face resistance at the higher levels as substantial Call writing is seen in 19,400 and 19,500 strikes. On the downside, series lows near 19,250 is expected to act as support.”

Bars reflect changes in open interest (OI) during the day. The red bars show call option OI and the green put option OI

The Bank Nifty, too, encountered the ferocity of the bears. As per analysts,  the immediate support for the Index is at 44,100 and a break of it can push the Bank Nifty, down another 200 points to 43,900, where its 100-Day Exponential Moving Average (DEMA) is placed.

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IT, auto and metal indices were up 0.3-0.7 percent each, while selling was seen in bank, pharma, FMCG and oil & gas names.

Among individual stocks, Adani Ports, TorrentPharma and HDFC AMC saw a bearish setup, while Coforge, MCX and Persistent saw a long build-up.

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