Nifty had a negative start in line with weak global cues but remained consolidative near the 11,300 mark. It closed negative with a loss of around 100 points, and again got stuck in a broader trading range.
The index formed a small-bodied candle similar to an indecisive Doji on the daily scale, as it was in the process to forming a Spinning Top candle on the weekly scale. Price formation indicated that declines were getting bought into, but follow-up buying momentum was missing at higher levels.
Major positive trend of the index remains intact but it needs to surpass recent swing highs to commence the next move. Now, it has to hold above 11,250 level to witness an up-move towards the 11,450-11,500 zone while on the downside support exists in the 11,200-11,150 area.
India VIX moved up 3.29 per cent to 20.61 level. Volatility inched higher slightly due to some profit booking decline, but overall it has cooled down gradually on a week-on-week basis, which suggests a bullish stance. A buy-on-decline strategy could continue in this market.
Maximum Put open interest stood at 11,000 level followed by 10,000, while maximum Call OI was at 11,500 followed by 12,000 levels. There was Call writing at 11,300 and 11,400 levels while minor Put writing was seen at 11,000 and then 10,800 levels. Options data indicated a trading range between 11,100 level and the 11,500-11,600 zone for the coming few days.
Bank Nifty opened in the negative and drifted towards the 21,900 level during the day. However, it remained consolidative, as it hovered near the 22,000 mark for most part of the session. The index formed a High Wave candle on the daily scale, which indicated indecisiveness as it got stuck in a broader trading range. Now, it has to hold above 22,000 level to witness an up-move towards the 22,300 and 22,500 levels, while on the downside immediate support was seen at 21,750 and then 21,400 levels.
Nifty futures closed negative at 11,294 level with the loss of 1.11 per cent. The trade setup was positive in Tata Power, MGL, PFC, IGL, Torrent Power, TVS Motor, Voltas, Jindal Steel, Ashok Leyland, Glenmark, Tata Chemicals and JSW Steel and weak in ICICI Pru Life, Axis Bank and HDFC.
(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)