By Chandan Taparia
Nifty50 opened flattish on Friday but witnessed buying throughout the session. The benchmark indices took support around the 50 DEMA on the daily chart and moved higher for the second consecutive session. It negated the formation of lower highs after four sessions, which indicated strength.
The index formed a bullish candle on the daily chart and a Bearish Engulfing Pattern on the weekly chart, which implied supplies at higher levels. At the same time, every decline got being bought into.
Momentum oscillator RSI took support around its recent swing lows in the 44 – 46 zone and turned northward. Going forward, if Nifty holds above 12,150 level, then an up-move towards 12,300 and 12,350 levels cannot be ruled out. However, major support remains intact at 12,100 and 12,050 levels.
On the options front, maximum Put open interest was at 12,000 followed by 12,200 levels, while maximum Call OI was at 12,500 followed by 12,300 levels. There was good amount of writing in Put options 12,200 and 12,250, while marginal Call writing was seen at 12,450 followed by 12,350 levels. Options data indicated a trading range between 12,000 and 12,500 levels.
India VIX fell 1.89 per cent to 15.56 level. However, volatility is likely to stay higher ahead of the forthcoming Union Budget 2020.
Bank Nifty managed to surpass the previous day’s high and extended the gains towards 31,375 level. It formed a bullish candle on the daily scale while bearish candle on the weekly scale, which suggestd buying on every dip, while supply was visible at higher levels. The index bounced back sharply from its crucial support at 30,800 level. It now needs to hold above 31,000 level to witness an up-move towards the 31,500- 31,600 zone, while on the downside major support was seen at 30,800 level.
Nifty futures closed positive at 12,271 with 0.58 per cent gains. Long buildup was seen in Jindal Steel, Century Textiles, Equitas, Bata, Ujjivan Finance and Motherson Sumi; while shorts were seen in LIC Housing, Tata Global, RBL Bank, NMDC and Cipla.
(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
