Nifty has to hold 17888 to move towards 18150-18200, low volatility giving comfort to bulls

Volatility is at lower levels which is giving comfort to the bulls and needs to sustain below 18 zones for market stability.

Nifty has to hold 17888 to move towards 18150-18200, low volatility giving comfort to bulls
Now Nifty has to hold above 17888 zones for an up move towards 18150 and 18200 zones.

By Shivangi Sarda

Nifty 50 index opened positive on Wednesday and kept up with the bulls at higher zones and went on to touch 17965 zones. It sustained at higher zones with slight consolidation and closed with gains of 120 points. It formed a Bullish candle on the daily scale and gave the highest daily close of the last ninety-one trading sessions. It has been forming higher highs from the last six sessions and now needs to cross the psychological 18000 marks for the momentum to continue. 

India VIX was slightly down from 17.69 to 17.68 levels. Volatility is at lower levels which is giving comfort to the bulls and needs to sustain below 18 zones for market stability. On the Options front, Maximum Call OI is at 18000 then 18500 strike while Maximum Put OI is at 17500 then 17600 strike. Call writing is seen at 18100 then 18400 strike while Put writing is seen at 17900 then 17800 strike. Options data suggests an immediate trading range between 17700 to 18100 zones while a broader trading range in between 17500 to 18300 zones.

Bank Nifty opened gap up by 110 points on Wednesday and kept moving in the northward direction since its initial tick. Buying was seen at every slight dip and it headed towards 39500 zones. It formed a small-bodied Bullish candle on the daily scale with long lower shadow and has been forming higher highs from the last six sessions. It gave the highest daily close of the last 193 trading sessions and closed with gains of 222 points. 

For weekly Bank Nifty, Maximum Put OI is at 39000 then 38000 strike and maximum Call OI is placed at 40000 then 40500 strike. We have seen Call writing in 40000 with unwinding at 39300 while Put writing is witnessed at 39400 strike. Now it has to hold above 39250 zones for an up move towards 39750 and 40000 zones whereas supports are placed at 39000 and 38888 zones. 

On the sectoral front, all the sectors baring Auto space were trading in the positive direction out of which PSU Banks, Media, IT, Financial Services and FMCG stocks showed the most strength. 

Now Nifty has to hold above 17888 zones for an up move towards 18150 and 18200 zones whereas support is intact at 17888 and 17777 zones. Traders are advised to buy on decline with positive stock-specific action in ZEE, Bajaj Finserv, ICICI Lombard General Insurance, Trent, LT Technology Services, Bank of Baroda, Apollo Tyre, Jubilant Foodworks, HDFC Life, Hero Motocorp, Havells, Glenmark, Bajaj Finance, Dixon, Canara Bank, HCL Tech, PNB, Pidilitind, Eicher Motor, Hindustan Unilever, and Dabur while weakness in PVR, PFC, Suntv, and Cipla.

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

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