Nifty : Bullish Above 17760
Nifty closed lower for four consecutive days to end the week with a loss of 321 points to close at 17532.05. Nifty faced heavy selling pressure near 17950 levels. It has formed a strong bearish candle in weekly time frame but formed a bullish hammer candle stick pattern in daily chart. We recommend investors to make fresh buys, if Nifty breaks and holds above 17760 levels. Any break below 17450, can take index to 17320/17250 levels. Volatility index India VIX was rising for the past 3 weeks and we expect volatility to be high as long as VIX trades above 14 levels.
Based on weekly option data, the highest PUT OI was seen at 17500 followed by 17400 strike which will act as a strong support. The highest CALL OI was seen at 18000 strike followed by 17700 strike, which will act as a stiff resistance. Any break above 17760 can take the index to 18000 levels in near term
Bank Nifty : Upward Trend Will Remain Intact Above 36880 Levels
The Bank Nifty closed the volatile week on a negative note at 37225.90 with a loss of 604 points. The Bank Nifty witnessed selling pressure at higher levels around 38000 and declined sharply to test a low of 36880 levels. The index witnessed fresh buying interest at lower levels and formed a bullish hammer pattern in the daily chart but formed a bearish candle in the weekly time frame. We expect the follow through buying in Bank Nifty above 37300 levels. The upward trend will remain intact above 36880 levels.
Based on weekly option data, the highest PUT OI was seen at 37000 strike followed by 36500 strike, which will act as a strong support. The highest CALL OI was seen at 38000 strike followed by 37500 strike, which will act as a stiff resistance.
Weekly – Index Level :
Derivative Activity For The Week
FIIs have increased their Long Position by 4211 contracts and have decreased their Short position by 1164 contracts. Out of total open positions, Long stands @ 58% and Short stands @ 42%. Pro have decreased their Long Position by 12880 contracts and have also decreased their Short position by 592 contracts. They are net short by 12288 contracts for the week. Clients have decreased their Long Position by 29717 contracts and have also decreased their Short position by 35478 contracts. They are net long by 5761 contracts for the week. Put/Call Ratio on OI (Expiry 28/10/21) : Nifty : 1.42 Vs Last week 1.11
Conclusion:
We recommend investors to make fresh buys, if Nifty breaks and holds above 17760 levels. Any break below 17450, can take index to 17320/17250 levels. Volatility index India VIX was rising for the past 3 weeks and we expect volatility to be high as long as VIX trades above 14 levels.
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