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F&O: Nifty seems to be consolidating with upside capped; VIX eases more

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By Chandan Taparia


Nifty failed to surpass previous day’s high of 11,587 on Friday and after a consolidative move, it fell towards the 11,450 level in the last hour of trade. However, the index witnessed a recovery of around 50 points from lower levels and managed to close above the 11,500 level.

The index formed a Bearish Belt Hold or a Bearish Engulfing candle on the daily chart and a Spinning Top candle on the weekly scale, as it made an opening high and remained under pressure for most part of the session. The RSI indicator is now turning lower on the daily scale, which suggests testing of lower support levels with a consolidative move along with capped upside.

Now, the index has to respect the immediate support at 11,450 level to witness an upmove towards the 11,600-11,650 zone, while on the downside, the next major support exists in the 11,350-11,333 zone.

India VIX fell marginally by 0.27 per cent from 20.10 to 20.04 level. VIX needs to cool down below 20-18 zone to get the bulls have a grip to kick off the next leg of rally.

On the options front, maximum Put open interest stood at 11,500 followed by 11,000 level, while maximum Call OI was at 12,000 followed by 11,600 levels. Brisk Call writing was seen at 12,000 and then 11,800 levels, while there was Put writing at strike prices 11,500 and then 11,200. Options data suggested a higher trading range between 11,300 and 11,700 levels.

Bank Nifty failed to surpass the immediate hurdle at 22,500 level, witnessed sharp selling pressure in the last hour of the session and fell towards the 21,750 mark. The index formed a bearish candle on the daily and weekly charts, even as it underperformed Nifty over the past couple of sessions.

The index has broken multiple support at 22,000 level, and saw the lowest daily close in last 20 sessions. If it sustains below 22,000 level, then weakness could be seen towards 21,750 and then 21,500 levels, while on the upside, key hurdles are seen at 22,500 and 22,750 levels.

Nifty futures closed flat to negative with the marginal loss of 0.03% at 11,519 level. The trade setup looked positive in Cipla, Lupin, Divi’s Labs, Cadila, Apollo Hospital, M&M, Grasim, TechM, Wipro, Balkrishna Industries and UPL but it was weak in Petronet, PNB, M&M Financial, Shree Cement, BHEL and Kotak Bank, etc.

(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.)

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