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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 started the session on a positive note on back of favourable clues from global bourses. Index remained quite volatile in a narrow range but concluded the session near to highest points of the day with its highest daily close in last sixteen trading sessions. It ended the truncated week a tad above 9100 mark and formed a Bullish candle on daily chart. On week-on-week basis, Nifty rallied 12.72% and posted its biggest weekly close after May 2009. It formed a Bullish Marubozu kind of pattern on weekly chart, indicating dominance of bulls as it turned well from its deep oversold territory. After many weeks of continuous correction in market, we witnessed emergence of buying interest by negating its lower top - lower bottom of last seven weeks, wherein all sectoral indices participated in the upside momentum. Index started to form Higher High - Higher Low from last three trading sessions and managed to close above 20 DEMA, indicating some stability in the market. Now, 38.20% retracement of the entire fall from 12430 to 7511, which is placed around 9400, would act as immediate hurdle for the bulls. Above that, major resistance can be seen at 9800 zones. On the flipside, immediate support is inching higher to 8888 and then 8650-8555 zones. A hold above 9100-9300 zones with follow up buying interest could give a confirmation for a short term bottom process in the market with shift in higher trading bands.
On monthly options front, maximum Call OI is shifted at 10000 then 9000 strike while maximum Put OI is at 8000 then 7500 strike. We have seen Put writing at 8500 followed by 9000 strike whereas Call Unwinding was seen at all the immediate strike with minor call writing at 10000 strike. Option data indicates a shift in higher immediate trading range in between 8500 to 9500 zones.
India VIX moved down by 4.78% at 49.74 levels. VIX is cooling down from higher levels, which is providing some stability to the bulls with short covering activities..
Bank Nifty out-performed the benchmark index and rallied by 5.10%. It formed a Bullish candle on both daily and weekly chart. It witnessed a sharp short covering bounce and concluded the shortened week with a gain of 15.45%, after a losing streak of last 6 weeks, which is biggest weekly gain after May 2009. However, Bank Nifty is yet trading below its recent swing low of 21462 and 20 DEMA. Going forward, immediate resistance for Bank Nifty is placed at 21000 then 21500 while support can be seen around 19100 and 18500 levels. Overall medium term chart structure is negative but some bounce could be seen with the immediate support of 19100 zones. However higher volatility and weakness in overall trading setup suggests that upside could be capped again.
Nifty Future closed positive with gains of 3.65% at 9070 levels. We witnessed good amount of long build-up in Lupin, Maruti, LIC HsgFin, Cipla and Bajaj Auto while marginal shorts were seen in Hindustan Unilever, TechM, Dabur, MFSL and Dr Reddys Lab.
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