By Chandan Taparia
Nifty50 opened positive on Wednesday and negated the formation of lower highs and lows of past two sessions. It formed a small green-bodied candle on the daily scale. If we combine the price structures of last two sessions, then we are witnessing the formation of a Bullish Harami pattern on the daily chart.
Once again, Nifty respected its crucial support at 50 DEMA, and started rebounding, which is a positive sign for the market. The index is trading in a wider range between 12,050 and 12,300 levels for past few sessions, as supports are getting visible at lower level. Nifty is witnessing selling pressure at higher zones. Going forward, as long as Nifty sustains above 12,050 level, we may see an up-move towards the 12,250 – 12,300 zone.
On the options front, maximum Put open interest was at 12,000 followed by 12,100 levels, while maximum Call OI was at 12,200 followed by 12,300 level. There was Put Writing at 12,100 followed by 12,150 level while Call writing was seen at 12,150 followed by 12,250 level. There was major Call unwinding at strike price 12,100. Options data indicated a trading range between 12,050 and 12,200 levels.
India VIX moved down 4.64% to 16.49. However, volatility is likely to stay high ahead of the forthcoming Union Budget 2020.
Bank Nifty opened positive, but consolidated in a 250-point range for most part of the session. It formed a small-bodied candle on the daily scale and negated the formation of lower highs and lows after two sessions. The index is stuck in a wider trading range between 30,600 and 31,400 levels in last seven session, as every dip got bought into while supply pressure emerged at higher levels. The index needs to hold above 30,800 level to witness a bounce towards 31,100 and then 31,250 levels. On the flip side, a sustainable move below 30,800 level may drag the banking index towards its next support at 30,500 and then 30,250 levels.
Nifty futures closed positive at 12,120 with a gain of 0.43 per cent. Long buildup was seen in Tata Motors, Bajaj Finance, M&M Financial, Bajaj Finserv and Marico; while Ramco Cement, Eicher Motors, United Spirits, NIIT Tech and Glenmark witnessed shorts buildup.
(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
