F&O Manual | Nifty erases losses and trades positively, support placed at 21,000 strike

Nifty erases initial losses and trades positively as bulls take charge. All sectoral indices are trading in the green, with oil & gas and power up 1 percent each. BSE Midcap and Smallcap indices are up 1 percent each.

At 1 PM, the Sensex was up 299.23 points or 0.42 percent at 70,805.54, and the Nifty was up 90.60 points or 0.43 percent at 21,240.80. About 2341 shares advanced, 851 shares declined, and 87 shares unchanged.

Bars in red indicate the change in open interest (OI) of call writers, while green bars show the change in OI of put writers

Option data suggests that put writers have built long positions at the 21,100, 21,000, and 20,900 strikes, which shall act as support for the day.

According to Sheersham Gupta, Director and Senior Technical Analyst at Rupeezy, “The correction seen on Wednesday has cooled an overheated market as Nifty was in the overbought zone for over two weeks. Going forward, the market is not expected to witness much action on the upside until the holiday season. However, the broader upside trend for the market is still intact given the conducive political environment and positive economic indicators.”

“20850 will be a crucial support level to watch out for, and below this level, the market can see levels of 20500. On the upside, 21500 will be a strong resistance,” he added.

Bank Nifty Levels

Bank Nifty has witnessed a smart reversal today, with support build-up emerging around the 47,000 mark. According to Avdhut Bagkar, Derivatives & Technical Analyst at StoxBox, “Once the index manages to sustain over 47,400, the trend might accelerate a sharp up move towards the 47,700 level.”

“Option data suggests heavy concentration in the 47,000 PE and 47,500 CE. We expect that stability over 47,400 shall prompt writing in the 47,300 PE, inevitably pushing the index toward higher levels of 47,700,” Bagkar said.

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