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Nifty 50 needs to hold 16250-16300 support for upside bounce; Watch SBI, Maruti Suzuki, TCS stocks for action

Options data suggests an immediate range between 16200 to 16600 zones while a broader trading range is between 16000 to 16800 zones.

Volatility cooled down after giving a rough ride to the market but needs to fall below 18 zones for bulls to be back in action.

By Shivangi Sarda

Nifty 50 index opened positive on Wednesday but witnessed pressure at higher zones and slipped down to 16300 zones which was followed by a recovery of more than 200 points. However, it gave up all its intraday gains and drifted lower in the second half of the session to close with losses of around 60 points. It formed a Bearish candle on the daily scale and has been making lower lows from the last three sessions.

India VIX was down by 2.85% from 20.42 to 19.83 levels. Volatility cooled down after giving a rough ride to the market but needs to fall below 18 zones for bulls to be back in action. On the Options front, Maximum Call OI is at 17500 then 17000 strike while Maximum Put OI is at 16000 then 15500 strike. Call writing is seen at 16400 then 16700 strike while minor Put writing is seen at 16300 strike. Options data suggests an immediate range between 16200 to 16600 zones while a broader trading range is between 16000 to 16800 zones.

Bank Nifty opened positive and moved in the upward direction for the first half of the session but drifted lower in the latter part. It closed above its 50 EMA with losses of around 50 points but has been making lower lows from the last four sessions. It formed a Bearish candle on the daily scale with a longer upper shadow indicating selling pressure visible at higher zones.

For monthly Bank Nifty, Maximum Put OI is at 34500 then 34000 strike and maximum Call OI is placed at 36000 then 35500 strike. We have seen Call writing in 35500 with unwinding at 37000 while Put writing is witnessed at 34600 with unwinding at 35000 strike. Now it has to hold a key support of 34750 zones, to witness a bounce towards 35250 and 35500 zones while on the downside support exists at 34750 and 34500 levels.

On the sectoral front, apart from FMCG, Banking and Financial Services, all the other sectors traded in the positive territory out of which Media, Realty and IT stocks showed the most strength.

Now Nifty has to hold key support of 16250-16300 zones to witness a bounce towards 16550 and 16666 zones while on the downside support exists at 16161 and 16061 levels. Traders are advised to buy on decline with positive stock specific action in Cholafin, SBI, HDFC AMC, Bank of Baroda, TCS, M&MFin, Bandhan Bank, Maruti Suzuki India, TVS Motor, MFSL, and Hero Moto Corp while weakness in Gujarat Gas, Deepakntr, Polycab, ICICI General Insurance, bharti Airtel, LIC Housing Finance, Bata India, SRF, Havells, UPL, MRF, Pidilitind, and Dabur.

(Shivangi Sarda is an Analyst – Equity Derivatives & Technicals, Broking & Distribution at Motilal Oswal Financial Services Ltd. Views expressed are the author’s own. Please consult your financial advisor before investing.)

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