Friday, October 30

F&O: Nifty50 forms higher lows, cooling VIX add to bullish mood

By Chandan Taparia

Nifty opened flattish on Tuesday and remained consolidative in a broad trading range between 11,888 and 11,988 levels. The index formed an Inside Bar and a Doji candle, as it traded inside the trading range of last session and then closed flat near the opening zone.
However, the index continued to form higher lows for a 12th session, but failed to surpass the previous day’s high and the psychologically important 12,000 mark. Now the index has to hold above 11,850 level to witness a bounce towards 12,000 and then 12,100 levels, while on the downside, major support exists at 11,750 level.

India VIX fell 1.96 per cent from 21.12 to 2.71 level. It needs to cool down below the 20-19 zone for the bull’s grip to tighten on the market.

On the options front, maximum Put open interest stood at strike price 10,500 followed by 11,000, while maximum Call OI was at 12,500 followed by 12,000 levels. Marginal Call writing was seen at 12,500 and 12,300 levels while there was Put writing at 11,600 and then 11,900 levels. Options data suggested a wider trading range between 11,600 and 12,200 levels, the immediate trading range lay between 11,700 to 12,100 levels.

Bank Nifty opened negative and remained under pressure for most part of the session and then drifted towards 23,400 level. It negated the formation of higher highs and lows of last seven sessions and closed in the negative territory for the second consecutive session. It formed a bearish candle on the daily scale and started forming lower highs by correcting about 1 per cent during the day. Now it has to hold above 23,500 level to witness a bounce towards 24,200 and then 24,500 levels, while on the downside, key support exists at 23,200 and then 23,000 levels.

Nifty futures closed flat to negative with the loss of 0.02% at 11,936 level. The trade setup looked positive in HCL Tech, Tata Chemicals, Infosys, RIL, Mindtree, Kotak Bank, Ambuja Cement and TechM but weak in LIC Housing Finance, ZEEL, M&M Financial, Bosch, RBL Bank, Siemens and MGL.

(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

Leave a Reply