By Shivangi Sarda
NSE Nifty 50 index opened gap up by more than 200 points and then remained consolidative within a range of 100 points throughout the day on Wednesday. The index failed to hold at higher levels and witnessed marginal profit booking to close the day with gains of 180 points. It formed a Bearish candle on the daily scale as it closed lower than its opening zones but has been forming higher lows from the last four sessions which indicates that the base of the market is shifting higher.
India VIX fell by 2.19% from 17.20 to 16.82 levels. Volatility has been falling for the last four weeks and needs to sustain at lower zones for market stability. On the Options front, Maximum Call OI is at 17000 then 16500 strike while Maximum Put OI is at 16000 then 15500 strike. Call writing is seen at 16700 then 17000 strike while Put writing is seen at 16500 then 16400 strike. Options data suggests a wider trading range in between 16200 to 16800 zones.
Bank Nifty opened gap up by around 340 points at 36061 levels and headed towards 36200 zones. However, it drifted towards 35880 zones and closed with gains of 250 points after the whipsaw move. It formed a Spinning candle with a small-bodied formation on the daily scale and gave the highest daily close of the last fifty-six trading sessions. It is forming higher highs – higher lows from the last three sessions with the support base gradually shifting higher.
For weekly Bank Nifty, Maximum Put OI is at 35000 then 35500 strike and maximum Call OI is placed at 36000 then 37000 strike. We have seen Call writing in 37500 with unwinding at 35500 while significant Put writing is witnessed at 36000 strike. Now it has to hold above 35750 zones to witness an up move towards 36250 and 36666 zones while on the downside support exists at 35750 and 35500 zones.
On the sectoral front, barring Media, Auto and Realty space, strength was seen in all other sectors out of which IT, FMCG, Metal, Banking and Financial Services space outperformed the market.
Now, till Nifty holds above 16350 zones, momentum could extend towards 16666 and 16800 zones while on the downside support exists at 16350 and 16250 zones. Traders are advised to be with positive stock-specific action in LTTS, PEL, Mindtree, LTI, Dixon, MCX, Can Fin Homes, State Bank of India, LUPIN, SBI Life, Dabur, Hindustan Unilever, and ITC while weakness in ICICIGI, Hindpetro, Havells, L&TFH, HDFC Life, Muthoot Fin, Biocon, and PVR.
(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.)