On the Monthly Option front, Maximum Call OI is at 18,000, then 17,000 strike, while Maximum Put OI is at 17,000, then 16500 strike. Call writing is seen at 17000, then 17250 strikes, while Put writing is seen at 17,000, then 16,800 strikes. Options data suggests an immediate trading range in between 16,800 to 17,200 zones.
Volume profile indicates Index has a strong support around 16850-16750 zone.
What should traders do? Here’s what analysts said:
Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas
The daily momentum indicator has a positive crossover and thus we shall continue to maintain our positive outlook on the index. On the upside initial targets are placed at 17200 and above that, it can extend higher to 17450 – 17500. The crucial support zone is placed at 16910 – 16870.
Ajit Mishra, VP – Technical Research, Religare Broking
Amid an uncertain global environment, participants are not reacting positively to any intermediate uptick in world indices and now a fresh decline in the broader markets further, adding to their worries. We thus recommend maintaining a check on leveraged positions and letting the market stabilize.
Rupak De, Senior Technical Analyst at LKP Securities
The trend remains bearish as the benchmark index Nifty continues to stay below the critical moving average. Besides, the bearish crossover of the 21 EMA and the 55 EMA has been boosting the bearish market sentiment. Sell the rally should be the theme for traders as the rallies are getting sold into. On the higher end, sellers may return around 17,250. The current weakness may take the Nifty towards 16,750 over the short term.Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The short-term trend of the Nifty continues to be weak with high volatility. The market is showing a lack of strength to sustain the highs. There is a possibility of Nifty revisiting the recent swing lows of 16,800 in the short term. Any attempt of upside bounce towards 17100-17150 levels could be a sell-on-rise opportunity.
Rahul Ghose, Founder & CEO, Hedged
Nifty Put writers seem to be extremely confident while going into the April series expiry as they are expecting a limited fall. The current OI distribution for Short strangles is at 16,500 on the downside and 18,000 on the upside for April expiry.
This further implies that traders are keeping more room on the upside and lesser room on the downside, signalling that they are not convinced with the fall currently underway. Even for the current weekly expiry, traders are not yet expecting the fall to be very large below the 17,000 level, as the 17,000 short straddle players have not yet exited their positions or rolled down the strikes to lower straddles.
If Nifty50 closes below the 16,750 level, all these sellers will get trapped leading to another 200-point fall in the index, but until that happens, it is better to maintain a sideways to bearish view on the index.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)