F&O Tracker: Key resistance level for Nifty seen at 8450

By Hiren Shah, Edelweiss

The June expiry saw market-wide rolls at close to 75 per cent compared to the average of 80 per cent for the last 3 expiries indicating some reduction in total positions. The Nifty also saw weaker rolls at about 65 per cent compared to an average of 75 per cent for the last 3 expiries. Auto stocks continued to outperform the markets and the engineering stocks like LT saw a very strong expiry.
Last week developments in Greece have kept global markets on the edge.

The negotiation process broke down, after the Greece prime minister's decision to seek a referendum vote on July 5 to decide whether or not to accept the conditions laid out for the country to receive further funds from its creditors or risk exiting the Eurozone. A greek exit would affect all the world markets and we could also see the reactions spill over to other weak Eurozone countries.

We are seeing open interest build-up of close to 50 lakh shares on the 8000 puts in the Nifty. This is high considering that we are currently only in the first week of the expiry.

This indicates that the 8000 levels continue to remain a base for the markets on the lower side and it would be difficult for the markets to break down from these levels. On the higher side 8450 is an important resistance level for the markets and any break out could see the markets move higher towards the 8700 levels.

On the options side low risk traders can look to do a bull call spread in Coal India by buying the 420 strike call and selling the 440 strike call in a net spread of 6.75. The maximum loss on the position would be the premium outflow and the position would be profitable once the stock starts moving above the 427 level.