Fin Nifty weekly expiry likely to be in 20,150-20,300 range; near term support at 20,150- Debdeep Gupta

Fin Nifty weekly expiry likely to be in 20,150-20,300 range; near term support at 20,150

06 Feb , 2024 By : Debdeep Gupta

Fin Nifty was trading firm on the afternoon of February 6, the weekly expiry day, up 0.3 percent at 20,375 points. Analysts expect the Fin Nifty index expiry range at 20,150-20,300. The index, however, can fall to 20,050-20,000 bands if it slips below the support level of 20,150.

Here is what Soni Patnaik, Assistant Vice-President, Derivatives Research, JM Financial, has to say on Finnifty's outlook for the expiry day:

The expiry range is between 20,150 and 20,300. If support at 20,150 also breaks, the index can test the 20,050-20,000 band

The Long: Short Ratio stands at 36:64.

- Volatility Index (VIX) is at 15.62.

- Foreign Institutional Investors (FIIs) maintain a positive outlook for indices and a slightly negative stance for Futures and Options (FnO) stocks.

In the February Futures, Open Interest (OI) saw an addition of over 30 percent, and its Put-Call Ratio based on OI (PCR_OI) is at 0.58, indicating a weak expiry.

Finnifty Derivative Data

Aggressive OI additions were observed in the 20,400 Call option, amounting to 0.58 lakh contracts. On the Put option side, OI additions were noted in the 19,900/20,000/20,100 Put options, each with over 0.25 lakh contracts, with the highest OI at 19,700 Put (0.79 lakh contracts).

Derivative Strategy by Patnaik: Sell Finnifty below 20,260 for a target of 20,150-20,050, keeping a stop loss of 20,350 (all spot levels).

Motilal Oswal Financial Services (MOFSL) said, the Fin Nifty index formed a bearish candle on the daily chart and is facing resistance near the 20-day Exponential Moving Average (DEMA). The overall setup suggests volatile swings within a wider trading range.

"It needs to hold above 20,250 zones for a bounce towards 20,450 and then 20,600 levels. A hold below the same could lead to a decline towards 20,100 and then 20,000 zones," it said.

Trading Range: The expected wider trading range is 20,000-20,100 to 20,450-20,600

Derivative strategy recommended by MOFSL:

Options Strategy: Options traders can initiate a Bull Call Spread (Buy 20,200 Calls and Sell 20,300 Calls) to capitalize on the upside move.

Option Writing: Option writers are suggested to write 20,600 Calls and 19,900 Put in pairs with double the stop loss.