The Fin Nifty index is anticipated to have a volatile trading day on the weekly expiry, with analysts predicting an expiry range between 20,150 and 20,300. However, if the support level of 20,150 is breached, the index could potentially fall to the 20,050-20,000 range. Soni Patnaik, Assistant Vice-President of Derivatives Research at JM Financial, emphasizes the importance of monitoring the support level as it determines the index’s direction.
The Long: Short Ratio currently stands at 36:64, indicating a slightly bearish sentiment among traders. Meanwhile, the Volatility Index (VIX) is at 15.62, implying a moderate level of market volatility. Foreign Institutional Investors (FIIs) maintain a positive outlook on indices but hold a slightly negative stance on Futures and Options (FnO) stocks.
In terms of derivative data, there has been a notable increase in Open Interest (OI) in the February Futures, with a growth rate of over 30 percent. The Put-Call Ratio based on OI (PCR_OI) is at 0.58, suggesting a weak expiry. Aggressive OI additions were observed in the 20,400 Call option and various Put options ranging from 19,900 to 20,100. Patnaik recommends selling Fin Nifty below 20,260 with a target of 20,150-20,050 and a stop loss at 20,350.
According to Motilal Oswal Financial Services (MOFSL), the Fin Nifty index has formed a bearish candle on the daily chart and is currently facing resistance near the 20-day Exponential Moving Average (DEMA). The overall setup indicates volatile swings within a wider trading range. MOFSL suggests that the index needs to hold above 20,250 to see a potential bounce towards 20,450 and 20,600. However, if it fails to stay above this level, a decline towards 20,100 and 20,000 is possible.
Traders should keep an eye on the expected wider trading range of 20,000-20,100 to 20,450-20,600. As for derivative strategies, option traders can consider a Bull Call Spread by buying the 20,200 Call and selling the 20,300 Call to take advantage of the upside move. Option writers, on the other hand, are advised to write the 20,600 Call and 19,900 Put in pairs with double the stop loss.
Please note that the views and investment tips expressed by investment experts on this platform are their own and not endorsed by the website or its management. It is always advisable to consult certified experts before making any investment decisions.
FAQ:
1. What is the anticipated trading range for the Fin Nifty index on the weekly expiry?
The anticipated trading range is between 20,150 and 20,300.
2. What could happen if the support level of 20,150 is breached?
If the support level is breached, the index could potentially fall to the 20,050-20,000 range.
3. What is the Long: Short Ratio?
The Long: Short Ratio currently stands at 36:64, indicating a slightly bearish sentiment among traders.
4. What does the Volatility Index (VIX) indicate?
The VIX is at 15.62, implying a moderate level of market volatility.
5. How do Foreign Institutional Investors (FIIs) view the indices and Futures and Options (FnO) stocks?
FIIs maintain a positive outlook on indices but hold a slightly negative stance on FnO stocks.
6. What is Open Interest (OI) and how has it changed in February Futures?
Open Interest refers to the total number of outstanding derivative contracts. In February Futures, there has been a notable increase in Open Interest with a growth rate of over 30 percent.
7. What is the Put-Call Ratio based on OI (PCR_OI)?
The PCR_OI is at 0.58, suggesting a weak expiry.
8. What are the recommended levels for selling Fin Nifty?
Selling Fin Nifty is recommended below 20,260 with a target of 20,150-20,050 and a stop loss at 20,350.
9. What resistance level is the Fin Nifty index currently facing?
The index is currently facing resistance near the 20-day Exponential Moving Average (DEMA).
10. What is the wider trading range for the Fin Nifty index?
Traders should keep an eye on the expected wider trading range of 20,000-20,100 to 20,450-20,600.
Definitions:
– Fin Nifty index: A stock market index that tracks the performance of the financial sector in India.
– Support level: A price level at which a security or index is expected to encounter buying pressure.
– Volatility Index (VIX): A measure of market expectations of near-term volatility.
– Foreign Institutional Investors (FIIs): Overseas entities that invest in the Indian financial market.
– Futures and Options (F&O) stocks: Derivative contracts based on stocks.
– Open Interest (OI): The total number of outstanding derivative contracts.
– Put-Call Ratio (PCR): The ratio of the trading volume of put options to call options.
– Bull Call Spread: An options strategy involving the purchase of a call option and the simultaneous sale of another call option with a higher strike price.
Suggested related links:
1. JM Financial
2. Motilal Oswal Financial Services