Nifty needs to breakout above 17200-17300 range to resume rally; 17150 remains intraday support level

Option chain analysis for the weekly contracts indicates no major formation with the highest build up seen in 17500 call whereas on the flip side is seen at the ATM 17200 PUT.

Nifty, nse, nifty50, stock market
17150 would be seen as intraday support for the coming session; but overall, 17000 – 16800 is to be considered as a sacrosanct support zone. Image: reuters

By Sameet Chavan

Barring the initial hiccup on Monday, it was overall a week of consolidation as we were approaching the monthly expiry as well as the calendar year end. Also, 17200 – 17300 was seen as a crucial zone in order to dictate the immediate direction as we step into the New Year. The expiry session on Thursday started on a soft note and tested intraday support of 17150 in the opening trade itself. This small down tick was merely a formality as we saw Nifty recovering immediately to erase losses. During the remaining part of the session, the Nifty 50 index remained in a slender range with no clear direction. Eventually, the lackluster session ended on a flat note tad above the 17200 mark.

There was no momentum seen in key indices yesterday and it was unlike a monthly expiry day where we see some wild swings. But since we were approaching the calendar year end, this sort of muted activity was no surprise to us. As far as levels are concerned, 17200 – 17300 remains to be a corridor of uncertainty for market participants and till the time we do not see convincing breakout above this range, the bulls would not have the upper hand.

On the flipside, 17150 would be seen as intraday support for the coming session; but overall, 17000 – 16800 is to be considered as a sacrosanct support zone. We reiterate that the indices may not be doing much; the individual stocks are not at all short of action. Hence one should continue to identify such potential movers and trade accordingly.

FIIs continued with their selling streak in the cash segment whereas in Index futures they covered some of their short positions. Option chain analysis for the weekly contracts indicates no major formation with the highest build up seen in 17500 call whereas on the flip side is seen at the ATM 17200 PUT.

(Sameet Chavan is the Chief Analyst-Technical and Derivatives at Angel Broking. Views expressed are the author’s own. Please consult your financial advisor before investing.)

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