Weekly View of the Market
The Market Undertone remained bullish with support of consistent FII buying and short covering. Nifty is trading near 9900 level and all the major sectors like Banks, Metals, Auto & reality are supporting the market trend. Sector rotation is likely to continue further. Just after start of July series we have seen put writers aggressively selling ATM puts and call writers unwinding short call positions. Put OI concentration has shifted towards 9700 from 9500 after start of July series in recent trading sessions. The Implied Volatility (IV) of calls was down and closed at 9.46% while that for put options closed at 9.32%. The Nifty VIX for the week closed at 11.25% and is expected to remain sideways. Overall market's cost-of-carry is on the lower side. Among Nifty Call options, the 10000-strike call has the highest open interest of 45 lakh shares followed by the 9900-strike call which have OI of over 44 lakh shares. On put side, 9700-strike put has the highest open interest of over 60 lakh shares in open interest respectively. The PCR OI for the week closed up at 1.57 from 1.29, which indicates OTM put writing. In the July option contracts we are seeing options open interests building up in 10000 calls and 9700 puts, which indicates range of 9700-10000 this expiry. On the technical front 9800-9840 spot levels is strong support zone and current trend is likely to continue towards 9950-9980.
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