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Nifty shows weakness ahead of expiry; should you buy on dips or wait for more correction?

Put possibility information shows that most open curiosity (OI) is positioned at 11,500 strike with 54 lakh contracts whereas name OI is probably the most at 12,000 strike with over 65 lakh contracts.

Ahead of the October sequence expiry, Nifty 50 opened beneath 11,650 factors following weaker international cues, however quickly recouped some losses to commerce close to 11,700-mark. Put possibility information shows that most open curiosity (OI) is positioned at 11,500 strike with 54 lakh contracts whereas name OI is probably the most at 12,000 strike with over 65 lakh contracts. “Ahead of the expiry option statistics are suggesting us that shorting is advisable if Nifty breaks the level of 11,680. For that we need to keep stop loss at 11770,” Shrikant Chouhan, Executive Vice President, Equity Technical Research, Kotak Securities informed Financial Express Online.

With a weaker opening for Nifty, Shrikant Chouhan mentioned that investor’s technique should be to buy the Nifty between 11620/11580 with a last cease loss at 11530. Nifty’s Wednesday’s shut beneath the help of 20 days SMA is a sign of additional weakness. Today, Nifty opened at 11,633, exhibiting weakness following a rout on Wall Street that noticed US stock markets tumble the worst in 4 months.

Watch for this important help

“Ahead of yesterday’s fall we were not expecting the Nifty to go below 11,800 levels, but volatility has increased,” Sameet Chavan, Chief Analyst – Technical and Derivatives, Angel Broking mentioned. He doesn’t count on Nifty to maneuver beneath the 11,700-mark this expiry however advises buyers to take care of warning with an eye fixed on 11,660 ranges which, in keeping with him, act as essential help. “Taking any direction I would still be hopeful till we are above 11,660. If the market exhibits strength of going above 11,775 and 11,800 then the expiry could be above 11,800,” he added.

Short the rally

HDFC Securities mentioned that the autumn within the Nifty OI Put Call ratio on the again of Call writing at 11800-11850 ranges and brief construct up by the FIIs’ within the Index futures and Index Option phase Indicates that one should be cautious for the markets. “Therefore, our advice is to be bearish and use any pullback rally to build fresh short positions with the stop-loss of 11850 levels. On the lower side support is seen around 11600 levels where Puts have been written,” HDFC Securities mentioned in a be aware.

The 11,660 degree is to behave as essential make-or-break ranges on a closing foundation, in keeping with Sameet Chavan. “Keeping all the uncertainties aside, that includes the US elections, technically we expect the market to move beyond 12,000 and go closer to 12,200-12,400 but we have to be watchful as well for the 11,660 levels,” he mentioned whereas advising a buy on dips technique except Nifty goes beneath 11,660 on closing.

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