Consolidation in Nifty may continue until 17450 is breached; 17100-17000 strong support this F&O expiry week

Consolidation in Nifty may continue until 17450 is breached; 17100-17000 strong support this F&O expiry week

By Sameet Chavan

Quite surprisingly, we had a gap down opening yesterday below 17100 which was much lower than what SGX Nifty was indicating. But this abnormality got settled immediately as we saw Nifty 50 returning to equilibrium in the opening trades after reclaiming the 17150 mark. It went on to move closer to 17300 around the mid session, but once again some nervousness in financial space dragged the benchmark lower to conclude the weekly expiry with a negligible loss.

Traders are advised not to trade aggressively in indices in this congestion phase, rather continue to focus on thematic moves which are likely to provide excellent trading opportunities.

Taking a glance at the F&O data, the 17100-17000 zone is expected to act as a strong support zone. On a net basis, a decrease in open interest was observed in Nifty, indicating a sign of long unwinding at the weekly expiry. In the options segment, the pile-up is visible in 17200 – 17000 Put strikes, which is expected to provide a cushion to any decline. While on the other end, 17200 & 17500 call strikes have seen some writing. The benchmark index is likely to remain in the congestion phase for the time being.

(Sameet Chavan is a Chief Analyst-Technical and Derivatives at Angel One. Views expressed are the author’s own. Please consult your financial advisor before investing.)