Hello Folks! I hope you are safe and healthy in this COVID-19 pandemic. In today’s article, I’m sharing weekly expiry analysis for 22nd October 2020.
Weekly Expiry Analysis: TECHNICAL OUTLOOK
- Benchmark index made one more attempt to break above the psychological 12000 mark; However, it gave up gains from higher levels. The index traded volatile during the day before closing with a 0.3% gain at 11937 level. The banking index also traded volatile, but it outperformed the benchmark index as it closed with a 1.3% gain at 24635 level.
- Benchmark Index has strong psychological resistance at 12000 level while the Banking index has resistance at 25000 level
- India VIX closed with a 1% gain at 22.9 level
- Metal Index outperformed the benchmark index as it closed with a 2.2% gain while FMCG and IT underperformed as they closed with 0.9% and 0.5% cut respectively
- Advance/Decline ratio was in favor of Advances and cash turnover was higher than 5 days average. FII were net buyers while DII were net sellers in the cash segment
- European markets closed near day’s low with 1-2% cuts and US markets closed with modest losses. Asian markets are also trading lower today amid ongoing stimulus talks in the US.
Intraday Market Outlook
Benchmark index is likely to trade in the range albeit with high volatility; Nifty has support at 11770-11650 and resistance at 12020-12150 level
Banking index is likely to trade volatile on the weekly expiry day with support at 24100-23600 and resistance at 25000-25400 level
HDFCBANK has given a fresh breakout with volume support and it is likely to continue its upside today as well.
Derivatives data – Brief commentary (21 Oct 20)
For Weekly expiry (22 Oct), max OI addition was seen at 12200 call and 11800 put. Max OI is at 12000 call and 11800 put. For Monthly expiry (29 Oct), max OI addition was seen at 12200 call and 10800 put. Max OI is at 12500 call and 10500 put. Cumulative Nifty PCR stands at 1.42 (21 Oct) Vs 1.46 (20 Oct)
Overall FII derivatives data is positive for Wednesday (21 Oct 20)
In Index futures, there was an addition on the long side and unwinding on the short side resulting in net long exposure going up at 65.4% (21 Oct) Vs 64.6% (20 Oct). In Index options, there was net unwinding in call options-short side and net addition in put options-short side.
Nifty: Weekly Expiry Analysis for 22nd October
After gave a breakout from 11800, Nifty is trading in a tight resistance zone i.e 11800 – 12000. A breakout from 12000 will give a new buy signal.
Yesterday We saw a sharp decline from higher levels that indicates that Nifty is facing good resistance around 12000. So for Today’s expiry, 12000 will play a major role for further upside levels. Personally, I’m not expecting a breakout from 12000 today. So we can keep hold our positions with Upside breakeven at 12050.
On the downside, 11800 is playing as a strong support level for today’s expiry. A breakdown from 11800 will give us new downside level. So based on charts, 11800 – 12000 can be the range for today.
Nifty Option Chain Analysis
Almost same picture we are getting from Open interest where 12000 strike is acting as a strong resistance level and 11800 strike is acting as a strong support levels.
Max Pain is at 11900 that is giving the expiry level based on the current data. Keep tracking changes in OI data. It will give you a signal if the range starts moving.
BankNifty: Weekly Expiry Analysis for 22nd October
After gave a breakout from 24000 to 24400 zones, BankNifty is trying to sustain above 24400. A sustainable breakout will give us new upside targets of 25000 & 25200.
Now on downside, 23500 to 23000 is acting as a strong support zone and a breakdown will give is a new sell signal.
One thing we need to keep in mind here that, BankNifty is trading in the strong resistance zone. A breakout will give us some new upside levels, but we may see some profit booking too. So keep your positions with a proper hedge.
BankNifty Option Chain Analysis
Based on the option chain data, The Highest OI is at 25000 CE and 2400 PE. These levels are acting as the immediate resistance and support levels respectively.
Max pain is at 24500, indicating an expiry level. Keep Tracking change in OI for further levels.
Based on the chart and OI data, 24000 – 25000 can be the range for current weekly expiry.
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DISCLAIMER: – we are not a SEBI research analyst. Views or the weekly expiry analysis posted here only for educational purposes. There is no liability whatsoever for any loss arising from the use of this product or its contents. This product is not a recommendation to buy or sell, but rather a guideline to interpreting specified analysis methods. This information should only be used by investors and traders who are aware of the risk inherent in securities trading.