F&O Manual | Markets trade in green, Nifty sees crucial straddle position at 19,300

Indian markets traded in the green by noon after a flat opening on neutral global cues on August 21. All the sectoral indices were in the green. At 11am, the Sensex was up 186.56 points, or 0.29 percent, at 65,135.22, and the Nifty was trading 48.50 points or 0.25 percent higher at 19,358.70. About 1,892 shares advanced, 1,200 declined, and 150 shares stayed unchanged.

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

The options data showed struggle at 19,300 points, with put and call option writers taking key straddle positions, a strategy of holding a position in both a call and put with the same strike price and expiration date. Strong resistance could be seen at 19,400, followed by 19,500 and 19,600.

According to Sameet Chavan, Head of Research for Technical and Derivatives at Angel One Ltd, the first sign of revival would be confirmed once the Nifty sustains above 19,370 – 19,400 levels, which may then push it towards the next cluster of 19,550 – 19,650.

“On the flipside, 19,250 is to be seen as a critical support because a drift below this would result in a sharp correction towards the major support zone of 19,100 – 19,000,” Chavan said.

Bank Nifty

As per the options chart, a tussle between call writers and put writers is observed. The Bank Nifty held on to the 44,000 zone as of 11.45am with major support near 43,500 and analysts believe that a decisive breach below this level shall further weaken the trend to anticipate for fresh selling pressure. At the same time, a decisive move past the 44,400 zone would improve the bias and expect for further rise.

Among individual stocks, LTTS, Bajaj Finance and Astral saw a bullish set-up, while Reliance, Voltas and BPCL saw a short build-up.

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