Nifty opened positive on Wednesday and witnessed sustained buying interest throughout the session as it headed towards the 13,620 level. The index continued its positive move for the second consecutive session and recovered well from the recent panic low of 13,133 to move towards 13,620 level. The market saw a comeback of the bulls with an improvement in the advance-decline ratio and closed the session with a gain of 135 points. The index formed a bullish candle on the daily scale and made higher lows for a second session. Now, it has to hold above the 13,500 level to witness a bullish bias and move towards its lifetime high in the 13,750-13,777 zone, while on the downside, major support exists at 13,333 and 13,131 levels.
India VIX fell 6.76 per cent from 21.98 to 20.49 levels. A cooldown in volatility from higher levels has given support for a decent bounceback. Now, it has to hold below 19 level to help the bulls continue their grip on the market.
On the options front, maximum Put open interest stood at 13,000 level followed by 13,500, while maximum Call OI was at 14,000 followed by 13,500 levels. There was marginal Call writing at strike prices 14,000 and 13,600, while Put writing was seen at 13,500 and then 13,400 levels. Options data suggested an immediate trading range between 13,200 and 13,750 levels.
Bank Nifty opened flattish but continued to move up towards the 30,000 mark. All the banking stocks saw strength and the index settled the session with a gain of more than 250 points. The index formed a bullish candlestick on the daily scale followed by a Dragonfly Doji candle in the previous session. Now, it has to hold above 29,500 level to witness a bounce towards 30,200 and 30,500 levels, while on the downside, support exists at 29,500 and then 29,200 levels.
Nifty futures closed positive at 13,619 level with a 0.98 per cent gain. The trade setup looked positive in Vedanta, Mahindra Finance, Wipro, Tata Consumers, Mindtree, Biocon, Chola Finance, Cipla, Tata Steel, Berger Paint, Voltas, Infosys, SRF, HUL, Grasim, Asian Paints and Havells but weak in PNB and HPCL.
(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)
Credit: Stocks-Markets-Economic Times