Bank Nifty recovers from early losses, to expire in 47,200-47,800 range

Bank Nifty was trading higher in the afternoon on April 3, making a smart recovery from morning lows. According to experts, a muted expiry is expected in the 47,200-47,800 range.

The “buy on dips” strategy would work as long as the 12-stock index closes above 47,000, they said.

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

The options data suggests that put writers are dominant at 47,200 and 47,000 strike.

Sameet Chavan, Technical Analyst at Angel One, said, “As of now, we are expecting a muted expiry session for Bank Nifty. The range to be watched would be 47,700-47,300. Profit booking should be done around the higher end, and a breakout on either side should trigger some directional move.”

Soni Patnaik, Assistant Vice President of Derivative Research at JM Financial, said a muted expiry is expected with an anticipated range of 47,200-47,800. A fresh upside move may occur above 47,800/48,000.

Also Read: F&O Manual | Market shows resilience amid volatile trading, experts suggest buy on dips

Derivative Strategy and Short-Covering Potential

Patnaik’s derivative strategy recommendation is to buy on declines around 47,300-200 with a stop loss at 47,000 and a target of 47,600-700 (spot levels). The sustenance of current levels in index heavyweight HDFC Bank may bring a short-covering rally in Bank Nifty.

“Bank Nifty looks sideways to bullish for the remainder of the day. If HDFC Bank sustains at the current level, it can bring in some short covering towards the end of the day, which may result in a last-hour spike in Bank Nifty,” said Shijumon Anthony, a derivatives trader.

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