option analysis report for 18 october 2016

 

option analysis

Nifty 9000 call option is trading at 2.45 closed down by 1.25 rupee loss in premium and has highest open interest standing at 68 lakhs. Strong writing is going on this nifty call option strike price while nifty 8600 call option has highest trading volume and closed at 51 rupees with 35 rupee loss in premium. So today writers were active at 8600 call options and earned good money and nifty closed with a loss. On put option side, highest open interest, as well as volume, was standing at 8500 put options which are closed at 69 rupees with 21 rupee gain in premium. That why nifty 8500 level is a crucial support level.

My conclusion is nifty 8500 is strong support and if breaks we might see panic selling in the market. On the upside, short covering rally will only happen above 8600 level which will act as strong supply zone for the market.

 

On bank nifty option side, bank nifty 19300 to 19500 call options seen strong writing and closed with losses. Highest open interest is at 19500 call option level while highest volume is seen at 19300 call option level. On bank nifty put option side, highest open interest is at 18500 put options and highest volume seen in 19000 put options suggesting strong short term support at 19000 level.

Banknifty option data suggest if bank nifty hold 19000 level then expect 19300 to 19500 level on the upside in short term but if 19k breaks then bank nifty might test 18500 zone in medium terms.

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