This week NSE Nifty traded above 15,000 level, where the rally was led by banking stocks. The FIIs are still buyer in the market whereas the DIIs are booking profit in these levels. Banking and infra stocks were leader in the market on the other hand phrama and media were laggard. In current week contracts, the Call writers are aggressive at 15,200 and above strikes whereas on Put side writes are active at 15,000 and below strikes. The monthly contracts also depict the same picture. The highest concentration band of option for current week is 15,500-15,000 strikes. India VIX bounced back and was trading around 24-25. The VIX is trading in a range for long time and 26 is a crucial level as it acts as resistance for long time. The traders should keep a check on this level as once it breaches then we can expect further profit booking in the market. The Implied Volatility (IV) gap between Calls and Puts in weekly contracts is little bit wide. The Put sellers are asking a high Implied Volatility as compared to the Call writers, which will attract the Put writers in the market. The Nifty straddle for monthly expiry on Tuesday closed at 198 lower as compare to last week as the two major events are over now that implies the option writers are comfortable at +/-198 points movement in coming sessions. The option max pain for Nifty current week contract is at 15,100 and for next week is at same level. The option max pain for Bank Nifty current week contract is at 36,000 and for next week is at same level. In coming sessions index is likely to trade in the range of 15,000 to 15,400. Further profit booking can be expected once it reaches 15,000 strike. In coming session, cement stocks are expected to outperform as buying interest seen in these stocks at this level.
The writer is a senior research analyst (derivatives) at SMC Global Securities Ltd