The NSE Nifty bounced back after testing a recent new low. The Nifty is in downward channel and making lower highs and lower lows. Nifty can move sharply once it breaches its channel. Metal and media stocks are showing strength whereas FMCG was weak. In monthly contract, the 15,000 strike is now playing as resistance where maximum Call writing can be seen whereas at 14,000 support is placed where we can see maximum Put writing followed by 14,500 strike. Bank Nifty shows a wide movement due to which the writers are not concentrated in single band.
Highest Call concentration is at 34,000 followed by 33,000 and 33,500 strikes in current month whereas on Put side the concentration is at 31,000 and 32,000 and multiple strikes. Long build-up was seen in NBFC and power stocks, whereas some long unwinding was seen in pharma and reality stocks. The India VIX is trading around 22-24 range right now. The VIX is trading in broader range of 26-16 since long. From the past few sessions, it was observed that spikes are rising in India VIX due to high intraday volatility. The Intraday range in India VIX is quite high as compared to the normal scenario. The Implied Volatility (IV) gap between ATM (At The Money) Calls and Puts in weekly contract is wider. As uncertainty ahead the Put writers are charging high Implied Volatility, which will attract Put writers to enter in the market. The Nifty straddle for monthly expiry on Tuesday closed at 188 higher as compared to last week that implies the option writers are comfortable at +/-188 points movement in coming sessions. The Bank Nifty straddle for current week is at 686, which is higher than previous week. The option max pain for Nifty current week contract is at 14,600 and for BankNifty current week contract is at 32,500 whereas both indices are trading above its high max pain level. In coming sessions index is likely to trade in the range of 14,300 to 14,800 beyond these levels can see a good movement.