Nifty opened flattish but failed to hold above immediate hurdle of 8665 and corrected towards 8600 zones. Index traded inside the trading range of last session without giving any decisive view for the next leg of rally and finally closed negative with the loss of around 15 points. It formed an insider day candle on daily chart indicates that bulls and bears both are not ready to leave their grip in the market.
Now it requires a decisive range breakout on the insider side to get a fresh move in the market. If it manages to hold above 8665 then it may head towards 8720 zones while holding below 8600 might attract a profit booking decline towards next support of 8540 then fresh selling towards 8475 zones.
India VIX spiked for second sessions with the gain of 4.37 per cent and rising volatility might give a pause in buying interest.
On the option front, maximum put open interest (OI) is at 8,500 followed by 8,400 strike while maximum call OI is at 9,000 followed by 8,800 strike. We have seen fresh call writing at 8,600, 8,700 and 8,800 strike which is keeping the limited upside in the maket.
Bank Nifty managed to close above psychological 19,000 zones but closed near to opening levels with marginal gains which indicates that bulls and bears both are fighting hard for 19,000 zones. It has to hold above 19,000 zones to witness an up move towards 19,250-19,300 zones while immediate support exists at 18,888 then 18,700 zones.
(The author is derivatives analyst, equity research at Anand Rathi Financial Services)