Nifty needs to breach 16061 for a bounce-back towards 16250-16400; watch DLF, HDFC other stocks for action

On the Option front, Maximum Call OI is at 16500 then 16200 strike while Maximum Put OI is at 15500 then 16000 strike.

Volatility is at its higher zones which is giving discomfort to the bulls and needs to come down for market stability. (Image: REUTERS)

By Shivangi Sarda

Nifty index opened positive on Wednesday but failed to hold above 16223 marks and drifted lower throughout the day towards 16006 levels. It remained weak for the most part of the day and selling pressure was seen at every small bounce to finally close with losses of 100 points. It formed a small-bodied Bearish candle and has started to make lower lows on a smaller time frame. 

India VIX was down by 1.40% from 25.63 to 25.28 levels. Volatility is at its higher zones which is giving discomfort to the bulls and needs to come down for market stability. On the Option front, Maximum Call OI is at 16500 then 16200 strike while Maximum Put OI is at 15500 then 16000 strike. Significant Call writing is seen at 16200 then 16150 strike while Put writing is seen at 15500 with unwinding at 15300 strike. Options data suggests a trading range between 15800 to 16400 zones.

Bank Nifty opened positive and remained resilient for the first half of the session. However, the second half was overpowered by the broader market and it surrendered all its intraday gains. It formed a Bearish candle on daily scale with long upper shadow indicating pressure at higher zones. 

For monthly Bank Nifty, Maximum Put OI is at 34000 then 33000 strike and maximum Call OI is placed at 35000 then 36000 strike. We have seen Call writing in 34600 while Put writing is witnessed at 34500 strike. Now it has to continue to hold above 34000 zones to witness a bounce towards 34500 and 34750 zones while on the downside support exists at 33750 and 33666 zones. 

On sectoral front, apart from Banking and Financial Services, all the other sectors traded in red with most weakness seen in IT, Media and Realty sectors.

Now it has to surpass and hold above 16061 zones for a bounce-back move towards 16250 and 16400 zones whereas a move below 16000 would open a downside towards 15800 zones. Traders are advised to stay light with a positive stock specific action in Concor, Balkrishna, NTPC, HDFC Life, ICICI Pru, HDFC and Britania while weakness in Asian Paint, Lal Path Labs, Berger Paint, Coforge, L&TFH, Mphasis, Mindtree, Deepakntr, DLF, SAIL, LTI, NMDC, Tatachem, Divislabs, UPL, Mcdowell, Poly Cab, Jublfood, Techm and TCS.

(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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