Market watch: What does the F&O market suggest about trade on December 22?

The Nifty 50 put call ratio (PCR) closed at 0.65 for the day..

The market globally rebounded from yesterday’s rout. Indian frontline indices gained a shade below one per cent. Nifty 50 gained by 0.94 per cent and closed at 16770.85 up by 156.65 points from yesterday’s close. At one point in time, Nifty 50 was trading above 16,900, however, profit booking mainly from banks led to a fall in the indices from its top. Nifty VIX cooled off and closed at 17.54 down by 7.53 per cent from yesterday’s close.

Activity on the F&O front for weekly expiry on December 23 shows 17200 to act as a strong resistance now. Highest open interest contract of 120703 stood at this strike price. The second-highest call option open interest 119279 for Nifty 50 stood at a strike price of 17500. In terms of the highest addition of open interest in the call options front, it was at 17200 in the last trading session. A total of 7862 open interest was added at this strike price.  

In terms of put activity, the highest put writing was seen at a strike price of 16800 (30317 open interest added on Dec-21-2021), followed by 15800 (21156 open interest added on Dec-21-2021). Highest total put open interest (93269 stood at a strike price of 16000. This is followed by a strike price of 16500, which saw a total put option open interest of 67607 contracts. 

The Nifty 50 put call ratio (PCR) closed at 0.65 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 16800.