F&O: Nifty again forms higher low; options show trading range widens

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F&O: Nifty again forms higher low; options show trading range widens


Nifty opened with a gap up near the immediate hurdle at 14,880 level on Thursday and headed towards 14,984 level. However, it could not hold at higher levels and witnessed some selling pressure in the last hour of trade and slipped towards 14,820 level.

In the process, Nifty formed a Doji candle, as after wild swings within a 160-point range, the index closed near the opening level with a gain of around 50 points. Also, it continued to form higher lows for the third session in a row. Now, the index has to decisively hold above 14,880 level to witness a range breakout and rise towards the 15,000 and 15,100 levels, while on the downside, support exists at 14,750 and 14,650 levels.

India VIX moved up marginally by 0.31% from 20.24 to 20.31 levels. Volatility has to cool down below 20 level to witness buying interest.

On the options front, maximum Put Open Interest stood at 14,000 level followed by 14,500, while maximum Call OI was seen at 15,000 level followed by 16,000. Minor Call writing was seen at strike prices 15,000 and 15,200 levels, while there was minor Put writing at 14,900 and 14,500 levels. Options data suggested a wider trading range between 14,500 and 15,200 levels.

Bank Nifty opened with a gap up above 33,150 level, but failed to surpass a key hurdle at 33,333 level and drifted lower. Banking stocks witnessed support-based buying, but selling pressure towards the end of the session dragged the index to 32,700 level. The index finally concluded the session with a loss of more than 200 points. It formed a bearish candle on the daily scale, but continued to form higher highs for the second session. Now it needs to decisively cross and hold above 33,000 level for a bounce towards 33,500 and 34,000 levels, while on the downside, support exists at 32,500 and 32,000 levels.

Nifty futures closed positive at 14,938 level with a gain of 0.34%. Among specific stocks, the trade setup looked bullish in JSW Steel, Jindal Steel, SAIL, Tata Steel, Ambuja Cement, ACC, Ultratech Cement, Hindalco, Ramco Cement, NMDC, Titan, Mindtree, Britannia, Marico and Dabur but weak in Amararaja Battery, Indiabulls Housing, Canara Bank, Powergrid, HDFC Bank and

Motor.

(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)



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