Expiry trade setup: Options data indicate strong support at 25,900 for today's expiry

NIFTY50

Max call OI:26,100

Max put OI:25,900

(Ten strikes to ATM, 28 Oct expiry)

NIFTY50 bounced back on Monday after two days of losses. The index touched 26,000 during the intraday session, but failed to close above it. The index continues to remain in a consolidation mode with 26,000 as a key psychological level of resistance. The global cues remain positive, with US inflation at 3.1% or below for two consecutive readings, as well as optimism about the US-China trade deal and hopes for a rate cut from the US Federal Reserve.

On the technical front, the index remains in a consolidation mode. According to the experts, the previous breakout level of 25,680 may now act as a key support level for the index on the downside. On the upside, the record high level of NIFTY50 at 26,277 remains a crucial resistance.

On the options data front, the 25,900 puts witnessed heavy open interest addition and held the highest open interest for today’s expiry, indicating a strong support for the NIFTY50. On the upside, 26,100 and 26,000 calls hold the highest open interest, indicating near-term support for today’s expiry.

Bullish outlook

Traders with bullish sentiment can execute a long call strategy by buying 25,900 calls. The strategy would turn profitable after the index moves above 26,057.

Bearish outlook

Traders with a bearish outlook can execute a long put strategy by buying a put strike of 26,100. The strategy would turn profitable after the index moves below the 25,993 level.

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