F&O Manual | Nifty stays downhill with key resistance at 20,100 points

Indian benchmark indices opened gap-down on September 20 in sync with Asian markets in negative territory and US markets ending in the red, while expiry day volatility dampened trades further. Bank, FMCG, pharma, IT, metal and realty saw heavy selling till 11.30am.

VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted various challenges that the market is facing in the near term. These challenges include Brent crude prices rallying to $94, the dollar index surpassing 105, the two-year US bond yields reaching 5.09 percent, and the rupee hitting record lows against the dollar. These factors collectively trigger strong headwinds for the market.

Additionally, there is the concerning news of a potential compression of Net Interest Margins (NIMs) at HDFC Bank, which could have a temporary impact on sentiments in the Bank Nifty.

At 11am, the Sensex was down 586.49 points or 0.87 percent at 67,010.35, and the Nifty was down 166.00 points or 0.82 percent at 19,967.30. About 1,272 shares advanced, 1,723 declined, and 88 shares traded unchanged.

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

Options data shows how call writers ruled the day so far. As per analysts, the Nifty had been moving in a tight range of 20,130-20,190 levels in the last two trading sessions. Though call writers further strengthened their position at the maximum call open interest strike of 20,100 in the Nifty today, forming key resistance at this strike.

“The 20,180 region kept a lid on the upside attempts on anticipated lines, confirming a bearish bias, leading to sharp slippages in the closing minutes. This prompted a lower opening today, with the 20,050-20,000 region expected to entice bargain buying,” Anand James, chief market strategist at Geojit Financial Services, said.

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Among individual stocks HDFC Bank, Reliance and Dabur saw a bullish setup, while HindCopper, M&MFin and Idea saw a bearish build-up.

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