F&O Manual | Bank Nifty sees selling pressure on expiry day; experts say sell on rise

Indian equity benchmark traded lower amid volatility on November 22 afternoon and the Bank Nifty slipped 300 points on the expiry day.

At 1 pm, the 30-pack Sensex was down 165.73 points, or 0.25 percent, at 65,765.04 and the Nifty traded 45.60 points, or 0.23 percent, lower at 19,737.80. About 1,228 shares advanced, 1,899 declined and 99 were unchanged.

Auto, metal, bank, and realty sectors were under selling pressure, while buying was seen in pharma, oil & gas, and power names.

Major Nifty gainers included BPCL, Cipla, Power Grid Corp, Hero MotoCorp, and Dr Reddy’s Labs. IndusInd Bank, Kotak Mahindra Bank, Adani Enterprises, Adani Ports, and M&M were among the losers.

According to the options data, immediate support for Nifty is at 19,500, followed by 19,550 zones. The index is likely to face hurdles at 19850 and then at 20,000. The index Nifty saw a drop in open interest of -10.60 percent with a 0.60 percent increase in price, indicating short covering.

The Nifty needs to stay above 19,750 for an upward move towards 19,850 and 20,000, with supports at 19,650 and 19,550.

Bank Nifty 

According to Avdhut Bagkar, a derivatives & technical analyst at StoxBox, “Bank Nifty is displaying weakness on its expiry day, with call writing observed in 43,600 CE, 43,700 CE, and 43,800 CE. The highest Open interest (OI) favours Call writers, implying a sell-on-rise strategy.

On the downside, 43,500 is acting as a support base. A dip below this level may accelerate selling pressure.

“Aggressive traders may choose to go long in 43,600 PE around 100, holding 40 as a support base and aiming for levels between 170 and 200. Technically, the 200-simple moving average (SMA) located at 43,300 is expected to provide crucial support against major selling pressure. On the upside, Bank Nifty must achieve a robust close above 44,500 to shift the prevailing bias,” Bagkar added.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to consult certified experts before making any investment decisions.