Market watch: What does the F&O market suggest about trade on January 4?

The Indian equity market welcomed 2022 with a bang. Nifty 50 opened with a gain of around 0.19 per cent in today’s trade and built strongly on those early gains. At the end of the day, it closed a shade below 1.6 per cent. What helped this gain was the strong outperformance of banking stocks like ICICI Bank and HDFC Bank. Despite such a rise in the major equity indices, Nifty VIX increased by 1.42 per cent.  

Activity on the F&O front for weekly expiry on January 6 shows 18000 to act as a strong resistance now. Highest open interest contract of 107602 stood at this strike price. The second-highest call option open interest 66814 for Nifty 50 stood at a strike price of 17900. In terms of the highest addition of open interest in the call options front, it was at 17900 in the last trading session. A total of 29688 open interest was added at this strike price. 

In terms of put activity, the highest put writing was seen at a strike price of 17500 (81525) open interest added January 3 2022, followed by 17600 where (49620) open interest was added on January 3 2022. Highest total put open interest (97754) stood at a strike price of 17300. This is followed by a strike price of 17500, which saw a total put option open interest of 91857 contracts.

The Nifty 50 put call ratio (PCR) closed at 1.5 for the day. A PCR above 1 is considered bullish while a PCR below 1 is considered bearish. 

Max pain at the end of today's trade stands at 17500.