F&O: Nifty50’s trading range shifts to 10,300-10,600 levels


The Nifty50 index continued the formation of higher highs and higher lows on Tuesday, but had a roller-coaster ride. It formed a Shooting Star candle on the daily chart, which indicates that the bears are active at higher levels to push the index to lower zones.

It managed to cross previous week’s high of 10,441, but faced a hurdle near its 50-DEMA. If it fails to hold above the 10,380 level, then weakness could be seen towards 10,333 and then 10,276 levels, while on the upside, hurdles are seen at 10,525 level.

On the options front, maximum Put open interest stood at 10,000 followed by 10,400, while maximum Call open interest was at 10,500, followed by 10,700 and 10,600 levels.

Put writing was seen at 10,400 and 10,500 levels, while significant Call writing was seen at strike price 10,700. The option band signifies a trading range between 10,300 and 10,600 levels.

India VIX fell marginally by 0.20 per cent to 14.46. Volatility needs to decline below 13-13.50 levels to extend its recent bounceback.

Bank Nifty continued its gains, but had a volatile move as it corrected from 25,000 to 24,600 level midway through the session. The index closed near its falling supply trend line by connecting the wing high of 27,613 and 25,723 levels. Now it has to hold above 24,500 levels to witness an upmove towards 25,000 and 25,100 levels, while on the downside, supports exist at 24,350 level.

Nifty futures closed with a marginal loss of 0.09 per cent at 10,423. Long buildup was seen in IOC, Bank of India, Pidilite India, M&M Finance, Ashok Leyland, CEAT, Hexaware and Ajanta Pharma, while shorts were seen in TCS, Apollo Hospital, UBL, Amar Raja Battery, TVS Motor and Ambuja Cement.

(Chandan Taparia is Technical & Derivative Analyst at Motilal Oswal Securities. Investors are advised to consult financial advisers before taking an investment calls based on these observations)

Source: Economic Times