Market watch: What does the F&O market suggest about trade on December 20?

The Nifty 50 put call ratio (PCR) closed at 0.49 for the day.

Domestic benchmarks ended the week on a very weak note. We saw the market closing red on every trading day of this week except for Thursday. Today Nifty 50 closed below 17,000 level and at the close, it was down 1.47 per cent or 252.7 points at 16995.7. The reason for such a sharp fall in the equity market globally including India is inflation concerns, rising cases of Omicron and the hawkish tone of central banks. All these factors are shaking the confidence of investors.  

Activity on the F&O front for weekly expiry on December 23, shows 17,300 to act as a strong resistance now although highest open interest contract of 153012 stood at  strike price of 18,000. The second-highest call option open interest 114568 for Nifty 50 stood at a strike price of 17300. In terms of the highest addition of open interest in the call options front, it was at 18000 in the last trading session. A total of 87062 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 (43482 open interest added on 2021-12-17 ), followed by 16500 (24994 open interest added on 2021-12-17). Highest total put open interest (76574) stood at a strike price of 17000. This is followed by a strike price of 16500, which saw a total put option open interest of 53274 contracts. 

The Nifty 50 put call ratio (PCR) closed at 0.49 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 17100.