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Derivative View for Monthly Expiry – October 28, 2021

October 28 2021 | Reading Time: 5 Minutes
Indian benchmark indices may open on a positive note today. At 8:15 am IST, SGX Nifty Futures was trading at 18,257, compared with Nifty’s close of 18,210 yesterday, indicating a positive opening for the bourses.
 
Nifty Futures – LTP 18,215.25
 
Nifty touched an all-time high of 18,604 on October 19. It formed a “bearish engulfing” pattern and witnessed a downfall for four consecutive sessions. However, Nifty rebounded sharply after touching key support level of 17,950 (21-EMA). From the last two sessions, Nifty has been maintaining higher high higher low price formation, but momentum has deteriorated where 14-day period RSI is trending downward and MACD has made a negative crossover.
 
On the options data front, PCR for monthly contracts expiring October 28 stands at 0.68. From the OI data perspective for weekly contracts expiring on October 28, maximum Call OI built up was seen for 18,500 strike price, followed by 18,300 strike price, which amounts to 143.70 lakh contracts and 139.86 lakh contracts, respectively. Likewise, maximum Put OI built up was seen for 18,000 strike price, followed by 18,200 strike price, which amounts to 83.88 lakh contracts and 79.32 lakh contracts, respectively. The volatility Index, India Vix, rose 14% to 18.31 last week.
 
After considering the above Technical and options data, we expect the index to remain sideways in the range of 18,100–18,350 in today's trading session. However, falling below 18,100 may turn more negative. Likewise on upside, to gain further from current level, the index must cross and hold above 18,300–18,350.
 
BankNifty Futures: LTP – 40,960
 
Bank Nifty has slowly and gradually picked up buying momentum and outperformed benchmark indices. The index has been trading higher top higher bottom price formation from three trading sessions. On the daily chart, momentum indicators, RSI, MACD, and ADX are trending higher and forming a positive slope toward upside with improved momentum.
 
On the options data front, PCR for contracts expiring October 28 stands at 0.76. From the OI data perspective for weekly contracts expiring on October 28, maximum Call OI built up was seen for 42,000 strike price, followed by 41,500 strike price, which amounts to 82.99 lakh contracts and 74.50 lakh contracts, respectively. Likewise, maximum Put OI built up was seen for 40,000 strike price, followed by 41,000 strike price, which amounts to 57.93 lakh contracts and 49.60 lakh contracts, respectively.
 
After considering the above technical and options data, the index is facing short-term resistance around 41,350 levels. For further upside, 41,350 will be the key level to watch. On the downside, the index has support around 40,500 levels and once it breaks below this level, it may head toward 40,000.
 
 
Bullish setup in stocks such as, United Spirits, Godrej Csm.Products, Cholamandalam Inv.& Fin, Larsen & Toubro Infotech among others.
 
Bearish setup in stocks Vedanta , Torrent Pharmaceuticals, Bandhan Bank, Pi Industries such as  among others.

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