By Chandan Taparia
The Nifty 50 index opened Wednesday’s session gap down on account of weak global cues but it managed to hold the previous day’s low and bounced to a key hurdle of 17777 zones. Despite dullness in the initial half, it recovered well and finally closed above 17700 with losses of around 40 points. It formed a small-bodied Bullish candle on daily scale with longer shadows on either side indicates tug of war between bulls and bears. Now it has to continue to hold above 17700 zones, for an up move towards 17850 and 18000 zones whereas support is placed at 17600-17580 zones.
India VIX moved up by 1.6% from 18.54 to 18.83 levels. Spurt in India VIX is giving a volatile swing and now it has to cool down below 15-14 zones to continue the smooth ride of the market. On Option front, Maximum Put OI is at 17000 followed by 17500 strike while maximum Call OI is at 18000 followed by 17900 strike. Call writing is seen at 18000 then 17800 strike while Put writing is seen at 17600 then 17650 strike. Option data suggests a trading range in between 17600 to 17900 zones.
Nifty and Bank Nifty is witnessing some volatile cues due to global market. Stock specific action to sustain the market at the current juncture.
Bank Nifty needs to hold 37700
Bank Nifty opened gap down and remained consolidative throughout yesterday. Selective PSU Banks gained strength and pulled the index towards 37900 zones. It formed a Bullish candle but an Inside Bar on daily frame. Now it has to continue to hold above 37700 to witness an up move towards 38000 and 38300 levels while on the downside major support is seen at 37300 and 37100 levels.
For weekly Bank Nifty, Maximum Put OI is at 37500 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 37500 and 37600 strike.
Stocks, sectors to watch out for
On sectoral front, PSU, Metal and Pharma counters drove the market whereas weakness was seen in Private Banks and some profit booking decline in Financial Services, Auto and FMCG stocks.
We have a positive stance in Power (NTPC, Powergrid, IEX, Tata Power), PSU (State Bank fo India, India Oil Corporation, OIL India), Real Estate (DLF, Sobha, Godrej Prop), Open up Theme Related stocks (PVR, Indian Hotel), Consumption (Mcdowell, UBL), IT (Tech, HCL Technologies, Mindtree, LTI and LTTS) and Selective Metal (Hindalco) stock. A hold above 17580-17600 zones could take the Nifty index towards 18000 zones in the next coming sessions.
(Chandan Taparia – Vice President – Equity Derivatives & Technical, Broking & Distribution, Motilal Oswal Financial Services. Views expressed are the author’s own. Please consult your financial advisor before investing.)