Nifty index opened gap up with the gain of around 50 points and continued it winning streak for six consecutive trading session. It has been making higher highs – higher low from last six trading sessions and till this doesn’t negate the formation, index may continue its move for coming sessions. Recently it recovered sharply from 7,927 mark and surpassed crucial hurdle of 8,333 mark on closing basis which has a bullish implication on chart. Now it has to continue to hold above 8,333 zones to witness an up move towards 8,450-8,500 zones while on the downside multiple support exists at 8,333 then 8,242 levels.
Looking at the option data, maximum Put OI is at 8,000 followed by 8,200 strike while maximum Call OI is at 8,500 followed by 8,700 strikes. We have seen fresh Put writing at 8,100, 8,200, 8,300 and 8,400 strikes which also indicates that bulls are comfortable in the market and not expecting much decline as of now.
We have seen a decline in volatility from higher levels and now rising Put Call Ratio may support the broader market.
Bank Nifty headed towards 18,151 levels and has been holding above crucial 18,000 zones. It has to hold the same to continue its up move towards 18,500 levels while on downside support are seen at 17,850 then 17,500 levels.
(The author is derivatives analyst, equity research at Anand Rathi Financial Services)