By Chandan Taparia
Nifty50 opened positive on Monday but consolidated in a narrow range of 65 points for most part of the session. It formed a small-bodied candle with a lower shadow on the daily scale, as every dip got bought into at lower levels.
Nifty50 has been making higher highs and lows for last two sessions, which is a positive sign for the index. The overall trend is positive. We maintain our ‘buy on dips’ strategy as long as Nifty holds above 12,150 level. On the upside, we may see an up-move towards 12,350 and then 12400 levels; while on the downside support is seen at 12,200 and then 12,150 levels.
In January options, maximum Put open interest stood at 12,000 followed by 11,500 levels, while maximum Call open interest was at 12,500 followed by 12,700 levels. There was Call writing at strike prices 12,700 and 12,500 while Put writing was seen at 11,900 and then 12,100 levels. Options data suggested a wider trading range between 11,900 and 12,500 levels.
India VIX moved up 4.63 per cent to 11 mark. It is currently hovering around its strong support zone at 10 – 11, and thus, we see a reversal in the volatility index in the coming days.
Bank Nifty opened positive and made a new lifetime high at 32,613 level, but witnessed some profit booking at higher levels towards the 32,250 mark. It formed a Bearish Candle on the daily scale, as it closed below the opening mark. However, it has started forming higher highs and lows since last two sessions. As long as the banking index sustains above the 32,000 mark, we may see an up-move towards the 32,750 – 33,000 zone.
Nifty futures closed at 12,331 with a marginal gain of 0.10 per cent. Long buildup was seen in Mindtree, Bata India, TVS Motors, Jindal Steel and Tata Motors, while shorts were seen in PEL, YES Bank, Cummins India and Canara Bank.
(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)
Source: Economic Times