Bank Nifty Expiry: 52,000 to act as crucial support as index falls over 500 points

The Bank Nifty Index, whose weekly options contract expire on Wednesday saw significant weakness as it fell by 413 points to trade lower by 0.79% at 52,155.80. The index had opened at its day’s high of 52,528 before facing selling pressure. The index hit a low of 52,077.90

As per the options market, the level of 52,000 will act as crucial support with Put options for the strike price having an open interest of 82.48 lakh while the change in open interest stands at 57.26 lakh.

On the other hand, 52,500 will act as immediate resistance as Call options have an open interest of 103.79 lakh while the change in open interest was 60.34 lakh.

At the time of writing, the Max Pain of the Bank Nifty index stood at 52,200. The Max Pain theory shows the level at which option sellers will face the least loss. However, the Max Pain level is dynamic and varies with significant changes in the market.

On the 15-minute time frame, the index was trading below the 21-period and 50-period Exponential Moving Average (EMA). Meanwhile, the Put Call Ratio (PCR) stood at 0.58 which signifies that the market might see some bullishness ahead. The PCR is the ratio of the number of puts to the number of calls and has been considerably high in cases of extreme movements in the market.

The India VIX, an index that measures the anticipated volatility in the market over the next 30 days, was up by 2.21% on Wednesday at 14.60.