F&O expiry outlook: Nifty support seen at 16260 on closing basis, watch out for 34200-34500 in Bank Nifty

By Sameet Chavan

US markets had a weak session overnight and as a result, the SGX Nifty Thursday morning indicated a sluggish start. In line with this, our markets opened lower and post the initial nerves,  the benchmark index NSE Nifty 50 settled around the 16250 mark. In fact as the day progressed, the fair bit of buying was observed in many heavyweight constituents. This momentum accelerated in the latter half of the day to conclude the session with over seven tenths of a percent gains convincingly above 16400.

With reference to our previous commentary, 16300 – 16260 acted as a sheet anchor and the hope of recovering from those levels turned into a reality. Fortunately, the buy on declines strategy once again played out well and the way we managed to close convincingly above 16400, bodes well for the bulls. Following a big gap down opening if things turn during the session and if global market supports then we may see Nifty going back to 16600 – 16700 levels in the coming sessions. At our end, IT and banking started participating late yesterday, but when they got involved, the market just took off to conclude the weekly expiry on a pleasant note. As far as immediate support is concerned, 16350 followed by 16300 – 16260 should be seen as key levels on a closing basis. 

For Nifty Bank, the key levels to watch out for would be 34500 – 34200 on the lower side and on the upside, 35200 – 35500. Traders are advised to remain positive but yes aggressive positions are not advisable till the time trend becomes strong.

Looking at the F&O data, a mixed position was observed in both indices on the weekly expiry. On the options front, 16400-16200 Put strikes have seen considerable OI concentration, which is expected to provide a cushion for any fall in the Nifty. While on the contrary, piling up of OI is seen at 16500 CE followed by 16600-16700 CE, suggesting the tentative resistance zone in the near term.

(Sameet Chavan is a Chief Analyst-Technical and Derivatives at Angel One. Views expressed are the author’s own. Please consult your financial advisor before investing.)

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