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The Indian stock market, as represented by its benchmark indices, is currently experiencing a decline, primarily driven by negative global cues. At noon, the Nifty index was down 139.50 points, or 0.55 percent, settling at 25,140.30. Analysts have identified potential support levels for the Nifty index, with the zone of 25,100-25,080 acting as immediate support, followed by a stronger support range of 25,000-24,980 if the index dips below 25,080. Options data suggests a crucial support zone at 24,900, with the highest put writing observed at the 25,000 level. Experts, such as Tejas Shah of JM Financial, anticipate that short-term moving averages will support the indices in any decline, with additional supports at 25,000 and 24,950 levels. The immediate resistance for Nifty is projected at 25,300-25,325 levels, with a further significant resistance zone at 25,450-25,500 levels.
The Bank Nifty, a sectoral index tracking banking stocks, is also experiencing a downward trend on the expiry day, trading down 250 points, or 0.50 percent, at 51,450 at noon. The 51,500 call option exhibits strong resistance due to its high open interest (OI) of 13 lakh, while support is situated at 51,300 with an OI of 10.4 lakh. Akshay Bhagtwat, Vice President of Derivative Research at JM Financial, notes that the 51,250 support level has held for Bank Nifty up to noon. Based on current options data, Bhagtwat predicts a range-bound expiry for the spot Bank Nifty between 51,250 and 51,550. Any significant movement will likely require a breach of either end of this range to shake out option writers. The intraday trading view remains positive as long as the 51,250 level holds, according to Bhagtwat.
Preeti K Chabra, Founder of Trade Delta, interprets the market's current position as a pause, potentially poised for an upside due to the perceived strength of Bank Nifty. She advocates for a long position in the market as long as the day's low for Nifty remains unbroken. The low ITM premiums, with no premiums in the ITM CE or PE sides, indicate a possible lack of momentum. Chabra proposes a strategy involving weekly short 25,200 CE (September 12) and 25,400 CE (September 12), along with a long monthly 25,000 CE (September). This strategy results in a net debit of 225, with a breakeven point at 25,228. It is important to note that investment advice from experts should be taken with caution and should be corroborated by independent research and consultation with qualified financial advisors.
Source: Global cues drag indices lower; Bank Nifty could expire range bound if 51,250 level holds