Support level moving up

The resistance level, after remained at 15,800 strike for two consecutive weeks, for Nifty moved up by 200 points to 16,000 strike, while support level jumped to 15,900 strike from 15,000 strike, where it stood for four weeks in a row.

Technology stocks mostly influenced the market movement last week. The technology stocks Wipro, L&T, Tech Mahindra, HCL Tech, took the NSE Nifty above 15,900 points after six weeks of consolidation. However, going ahead, analysts expect that banking stocks would remain in focus as banking results will be in focus.

However, top-10 Nifty stocks stayed range bound and trading below resistance levels owing to highest Call bases.

Dhirender Singh Bisht, senior research analyst (derivatives) at SMC Global Securities Ltd, said: "Nifty indices climbed to its record highs in the week gone by, but still could not manage to surpass above the key psychological mark of 16,000 points as banking stocks remain laggards. However, IT metal and pharma stocks shone on the board to support the markets."

On the options front, the derivatives activity is relatively low, when compared to the last couple of weeks. Considering recent Put writing and Nifty move above 15,900 strike, derivatives analysts forecast some positive bias in the Nifty towards 16,200 level. Hence, long positions are advisable till the Nifty sustains above 15,800 level, which is the major Put base. A move below 15,800 may keep the ongoing range bound movement intact.

The highest Call OI is seen at 16,000 strike followed by 16,200/16,500/16,100/15,900 strikes. Further, 16,000/ 16,500/16,300/15,950 strikes witnessed reasonable addition of Call OI.

Coming to the Put side, 15,900 strike recorded maximum Put OI followed by 15,900/15,880 15,700/ 15,300 strikes. Moderate Put OI build-up is seent at 15,900/ 15,700/ 15,650/15,300 strikes.

"On the derivatives front, tussle between bulls and bears was seen in range of 15,900 points and 16,000 points as all writers' holds maximum Open Interest at 16,000 strike, while Put writers seen adding Open Interest in 15,900 Puts," said Bisht.

BSE Sensex closed the week ended July 16, 2021, at 53,140.06 points, a net recovery of 753.87 points or 1.43 per cent, from the previous week's closing of 52,386.19 points.

Registering a rebound of 233.60points or 1.48 per cent, NSE Nifty ended the week at 15,923.40 points from 15,689.80 points a week ago.

Bisht forecasts:

"Technical setup suggests that 36,000 mark will act as crucial resistance for banking index above which we could witness fresh breakout on the charts which could take Nifty towards all-time highs and above 16,000 level this time, while Bank Nifty could surge towards 36,800 level in upcoming sessions."

India VIX declined 4.60% to 11.70 level.The derivatives segment witnessed a uptick in volatility index in the penultimate week. A round of uptick in volatility is expected considering results from almost 12 index companies next week.

The Implied Volatility (IV) of Calls closed at 11.62 per cent, while that for Put options closed at 12.07 per cent. The Nifty VIX for the week closed at 12.27 per cent. PCR of OI for the week closed at 1.42," remarked Bisht.

In the F&O space, FII activity remained sluggish since beginning of July F&O series. FIIs bought index futures worth Rs3,825 crore, stock futures to the tune of Rs1,037cr and Rs793-cr options during the week.

Bank Nifty

NSE's banking index closed the week at 35,751.80 points, a net gain of 679.85 points or 1.93 per cent, from the previous week's closing of 35,071.95 points.

Since most banking heavyweights are hovering near their highest Call bases, thus a move above their Call bases will be crucial for banking to perform. According to ICICI Direct.com, the 36,000 strike should be a critical level and sustainability above this may open doors for fresh upsides.

The market witnessed addition of fresh long positions as the index moved towards its Call base of 36,000 strike along with rise in OI. Analysts feel the ongoing momentum should continue in coming days.

F&O Turnover

Product Contracts Turnover (Rs/cr) Premium (Rs/cr)

Index Futures 1,85,618 15,768.05 --

Stock Futures 6,94,140 55,707.29 --

Index Options 2,57,50,180 25,37,319.68 10,945.59

Stock Options 26,46,642 2,17,627.38 3,315.00

F&O Total 2,92,76,580 28,26,422.40 14,260.59