Nifty index opened flattish but was struggling between positive and negative price territory for most part of the day. However, it took support near to 8,540 mark and recovered by around 50 points from day’s low but failed to reclaim its 8,600 mark. Index managed to close positive with the gain of around 20 points after the weakness of last two sessions.
It formed a bullish Hammer candle after the profit booking decline of around 180 points in last two sessions and giving an early sign of halt in selling with the support based buying activities.
Now it has to cross and hold above 8,620 zones to witness an up move towards 8,665 then 8,720 zones while on the downside support exists at 8530 then 8475 zones.
On the option front, maximum Put OI is at 8500 followed by 8400 strike while maximum Call OI is at 9000 followed by 8800 strike. We have seen fresh Put writing at 8400 and 8500 strike which may provide support on decline while fresh Call writing at 8500 and 8600 strike would keep the limited upside for next coming sessions.
India VIX fell down by 4.74% at 14.21 levels and falling volatility is again support the traders to hold on the position.
Bank Nifty managed to find support near to 18500 and headed towards 18700 zones but finally closed flattish and missing a follow up action to move on higher side. Now it has immediate hurdle at 18888 then 19000 zones while support exists at 18500 then fresh selling towards 18250 levels.
(The author is derivatives analyst – equity research at Anand Rathi Financial Services)