Put Writing at 7,800 & 7,900 Offers Support
ETMarkets.com: The Nifty50, which surpassed its crucial psychological level of 7,900 earlier this week, lost some momentum in Wednesday’s trade, but strike prices 7,800 and 7,900 will provide adequate support to the indices in case it starts drifting southward, options data showed.
FreshPutwritingwasseenatstrike prices 7,700 (8.8 lakh contracts added), 7,800 (25.61 lakh contracts added) and 7,900 (13.16 lakh contracts added), which will provide the muchneeded support in case Nifty50 starts correcting, options data collated on Monday showed. Call unwinding was also witnessed at strike prices from 7,500 to 8,000, which has a bullish undertone. Call option writers are reversing their positions as chances of the market heading northward are higher than the reverse.
Call unwinding was seen at strike prices 8,000 (9.9 lakh contracts shed), 7,900 (7.4 lakh contracts shed), 7,600 (5.05 lakh contracts) and 7,500 (4.9 lakh contracts shed).
If the index does start heading southward, it will have support near 7,850 and below that long liquidation may attract profit booking, causing Nifty to decline towards the next major support at 7,777, which is its 200-day exponential moving average, experts said.