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Published on 1/04/2020 6:22:20 PM | Source: Motilal Oswal Securities Ltd

Bank Nifty underperformed the benchmark index for third consecutive session - Motilal Oswal

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Below is the Views On F&O Round-up by Chandan Taparia, Derivative & Technical Analyst, Motilal Oswal Financial Services Ltd

Nifty index opened on a flat note but it started correcting right from the ‘word go’. Index continued to make lower lows for major part of the session and tested 8200 mark in intraday trades. Eventually, it concluded the session around 8250 levels and formed a Bearish candle on daily scale. The selling pressure was seen across the street as all sectoral indices ended in negative territory wherein IT and Banking heavyweights lead the fall. At current juncture, weekly set up of Nifty is negative and small bounces are also getting sold-off quickly. Thus, traders should refrain taking long positions. Going forward, resistance for Nifty is placed at 8555 and then 8888 zones; while support is now placed at 8000 and 7700 levels.

On monthly options front, maximum Call OI is at 9000 and then 10000 strike while maximum Put OI is at 8000 then 7500 strike. We haven’t seen any noticeable activity in Call Options, while OI build-up was seen at 7500 and 7000 put options. Option data indicates an immediate trading range in between 7500 to 9000 zones.

India VIX fell down by 6.03% at 60.52 levels. VIX is cooling down from higher levels, which may provide some stability but at the same time trend is in pressure and supply is visible at higher levels.

Bank Nifty underperformed the benchmark index for third consecutive session and fell by 4.89%. After an Inside Bar formation on Tuesday, banking index breached the low of last two sessions and fell sharply towards 18000 zones. It formed a bearish candle on daily chart, which resembles a bearish belt hold pattern. At current juncture, it is hovering around 61.80% retracement level of the recent up move from 16116 to 21462. If it breaks and sustains below 18000 mark, then we may see further correction towards 17000 and 16600 levels. On the flipside, resistance for Bank Nifty is placed at 19200 and then 20000 levels. Till the time, Bank Nifty sustains below 18700 levels, bears will have upper hand and we may see selling pressure on bounce back move.

Nifty Future closed negative with losses of 4.19% at 8260 levels. We witnessed marginal long build-up in Biocon, M&M Fin, Godrej CP and Hero Motocorp while good amount of shorts were seen in Jindal Steel, Kotak Bank, TVS Motor, Cummins, SrtransFin.

 

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