Nifty index opened flattish and witnessed a choppy day as it traded in a narrow range of 44 points. It was flirting with positive and negative territory for the most part of the day and finally closed the day with an intraday gains of around 2 points. In the entire process index formed a small “Doji candle” as it closed near to opening levels after slightly moving up and down in a broader trading range. Usually a Doji candle in between trading range means that bulls and bear are fighting hard to get their grip but closing without any decisive result.
It negated its positive trend of making higher highs – higher lows and started to form lower highs and lower lows price structure. Now it has to cross and hold above 8350-8360 zones to start fresh up move towards 8420 and 8450 zones while holding below 8285 zones may get a profit booking decline towards next support of 8242 then 8220 levels.
Looking at the option data, maximum Put open interest (OI) is at 8,200 followed by 8,000 strike while maximum Call OI is at 8500 followed by 8700 strike, fresh Put writing was seen at 8300 strike which may provide support to hold it above 8285-8242 zones.
Bank Nifty managed to hold above 18,000 zones and headed towards 18,225 mark. It has outperformed the broader market and till it holds above 18,000 zones, immediate trend may remain intact to positive. It has support at 18,000 then 17,777 zones while hurdle at 18,250 then 18,500 levels.
(The author is derivatives analyst – equity research at Anand Rathi Financial Services)