Options data suggests a broader trading range in between 17200 to 18200 zones while an immediate trading range in between 17500 to 17900 zones.
By Shivangi Sarda
Nifty 50 index opened positive and headed towards 17884 in the first half of yesterday’s session but it could not hold at higher zones. Bears dragged the index and it drifted towards 17613 marks by breaking below the previous day’s lows. It closed near intr-day low with losses of around 175 points and wiped away previous day’s gains. It formed a Bearish Engulfing candle on a daily scale and threatening the short term trend with sustained supply at higher zones. India VIX moved up by 5.69% from 16.39 to 17.33 levels. Spurt in volatility after the decline of last four sessions has again given a volatile swing to the broader market. Now VIX needs to cool down below 15-14 zones to continue the smooth ride of the market.
Options data shows Maximum Put OI is at 17000 followed by 17500 strike while maximum Call OI is at 18000 followed by 18500 strike. Minor call writing is seen 17800 then 17700 strike while Put writing is seen at 17800 then 17700 strike. Options data suggests a broader trading range in between 17200 to 18200 zones while an immediate trading range in between 17500 to 17900 zones.
Nifty and Bank Nifty faced some weakness and fell despite touching higher zones due to increased volatility. Stock specific action to sustain the market at the current juncture.
Bank Nifty opened positive and even after crossing 38100 levels, weakness in the street caused the index to cascade by more than 600 points from higher levels. It respected its previous day’s low levels but closed with losses of around 220 points. It formed a Bearish candle on daily scale with long upper shadow which indicates that the absence of follow up buying is missing in the market.
For weekly Bank Nifty, Maximum Put OI is at 37000 strike and maximum Call OI is placed at 38000 strike. We have seen Call writing in 38000 and 37900 while Put writing is witnessed at 36500 and unwinding in 37500 strike. Now it has to hold above 37500 zones to witness an up move towards 37850 and 38100 levels while on the downside major support is seen at 37300 and 37000 levels.
On the sectoral front, all the sectors slide into the negative territory as the day concluded out of which Metal, PSU Banks, Pharma and Realty stocks faced the most hit.
We have a positive view on Chemical stock (SRF, Tata Chemical, Deepak Nitrite, Navin Fluorine), Open up Theme Related stocks (PVR, Indian Hotels, IRCTC), Consumption (Marico, Tata Consumer Products, Marico). A hold near 17700 is required for a move towards 17777 and 17900 levels whereas on the downside support is seen at 17580 and 17450 zones.
(Shivangi Sarda is a Quantitative Analyst, Derivatives and Technical Research at Motilal Oswal Financial Services Ltd. Views expressed are the author’s own.)