Technical and derivative: Nifty, Bank Nifty end with cuts

Let us take a glimpse into what happened in markets over this week.

Oct 25, 2020 09:10 IST India Infoline News Service

Technical
The Nifty ended the week slightly higher. On the weekly chart, a bearish Harami pattern has formed which suggests a pause in the uptrend. Daily RSI is in the bullish crossover. On the higher end resistance is placed at 12100; a decisive breakout above 12100 may induce strong rally in the market. On the other hand, failure to sustain above 11850 may trigger selling pressure in the market.

Derivative
Markets traded with a positive bias for the major part of the week with both Nifty & Bank Nifty index closing the week ~1.5%/4% cut. Both Nifty & Bank Nifty index added fresh long positions during the week as open interest surged higher along with a rise in the underlying price. Short gamma positions were the flavour of the week as the Nifty index traded in a narrow range. FII’s index future long/short ratio saw a marginal dip below the 2x level as the FII’s marginally unwind their long positions, however, the ratio continued to remain in the favour of the bulls.

India VIX index closed the week on a flat note at 21.7. On the options front (October 29, 2020 expiry), put option writing was seen in both Nifty & Bank Nifty as the indices trended higher during the week, making 11,700/24,000 level in Nifty/Bank Nifty as an immediate floor for the indices during the current weekly expiry.

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