F&O Action: Futures and Options market cues for trading on February 4

Max pain at the end of today's trade stands at 17600.

After a quick fall in volatility as measured by Nifty VIX from 22.11 on January 31, 2022, to 17.41 on February 3, 2022, today it closed on 19.56. This was reflected in the market (Nifty 50) today. From the day’s high of 17,781, the markets today declined almost 220 points to close at 17,560. It faced resistance at the 23.6 per cent Fibonacci level placed at 17,815 and might take support on the 38.2 per cent Fibonacci level at 17,490 level. Despite the registered fall in the market, there were pockets such as auto, consumer durable, FMCG, consumer discretionary and metal that did well. On the flip side, IT, realty, capital goods and finance sectors underperformed. Having said that, despite ending in red, broader markets outperformed Nifty 50. 

Activity on the F&O front for weekly expiry on February 10 shows 18500 to act as a strong resistance now. Highest open interest contract of 71862 stood at this strike price. The second-highest call option open interest 65537 for Nifty 50 stood at a strike price of 18000. In terms of the highest addition of open interest in the call options front, it was at 18500 in the last trading session. A total of 52173 open interest was added at this strike price. 

In terms of put activity, the highest put writing was seen at a strike price of 17000, where 24879 open interest was added today, followed by 16000 where (22891) open interest was added. Highest total put open interest (42038) stood at a strike price of 17000. This is followed by a strike price of 17500, which saw a total put option open interest of 38818 contracts.

The Nifty 50 put call ratio (PCR) closed at 0.62 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 17600.