F&O Manual | Nifty is down, economists predict profit taking below 21,500

F&O Manual | Nifty is down, economists predict profit taking below 21,500

F&O Manual | Nifty is down, economists predict profit taking below 21,500

As long as the Nifty stays above the 21500 mark—below which profit booking is anticipated—ICICI Securities will continue to be bullish on the index.

The Nifty was down 144.00 points, or 0.66 percent, at 21,566.80, while the Sensex was down 467.41 points, or 0.65 percent, at 71,558.74 at 12:03 PM IST.

At midday on January 8, benchmark Indian indexes were trading lower, following the lead from sluggish international markets. Analysts predict that 21,500 is the critical support level for the Nifty. A violation of this threshold would make people cautious and perhaps lead to another wave of liquidations.

Aside from this, the forthcoming quarterly earnings reports of big IT firms like TCS and Infosys this week are anticipated to have a big impact on the market environment.

The Nifty was down 144.00 points, or 0.66 percent, at 21,566.80 at 12:03 pm, while the Sensex was down 467.41 points, or 0.65 percent, at 71,558.74. 1,788 shares fell, 1,591 shares increased, and 79 shares stayed the same.

According to options data, call writers dominated the day. There was a lot of call writing near the 21,700 level, and strikes 21,750 and 21,800 also constituted solid resistance.

In terms of statistics, Nifty Open Interest maintained its all-time high of almost 1.3 crore shares despite some small liquidations. Because such huge leverage might start a liquidation cycle, one should be cautious below 21500 levels. Nifty premium has fluctuated significantly at the same time, going from 140 points to 70 points in quick succession, which suggests hesitancy at higher levels, according to ICICI Securities.

The brokerage business said, "We will remain constructive on Nifty as long as it remains above the 21,500 level, without which profit-booking cannot be ruled out."

Strong call writing is advised on the 48000, 48200, and 48400 strikes, according to Open Interest Data Bank Nifty. "On Monday, Bank Nifty broke through the crucial 47800 support level, signaling a bearish bias. Any increase in value should be taken advantage of for intraday shorting possibilities, according to Stockbox's technical and derivatives analyst Avadhoot Bagkar.

"Strong writing at 48,000 AD is revealed by the options data, with an intensity of highs at 47,900 and 47,800," he said. For now, the trend is still positive."

In his advise to traders, Bagkar suggests buying at 47,900 PE around 230–200 levels when there is some downside in the index. He points out that a pullback would have been expected given the selling pressure that has been there since the morning. As. He predicts that today's closing index will be lower than 47,750.