Nifty opened with a gap up above 14,800 level on Friday and remained consolidative in a broader range of 100 points through the session. It continued the positive streak for the third consecutive session and traded above the 50 DMA. The index closed positive with a gain of around 100 points and continued to form higher lows for the fourth session in a row.
The index formed a Doji candle on the daily scale and a bullish candle on weekly chart, which indicated that every decline is getting bought into. Hurdles remained intact at higher levels. Now, Nifty has to hold above 14,750 level to witness a bounce towards the 15,000 -15,050 zone, while on downside support exists at 14,700 and 14,600 levels.
India VIX fell 5.52 per cent from 22.03 to 20.82 level. The fear gauge needs to hold below 20 level to again attract a bullish stance.
On the options front, maximum Put Open Interest stood at 14,000 level followed by 13,500, while maximum Call OI was seen at 15,000 level followed by 15,500. Call writing was seen at strike price 15,500 while there was Put writing at 14,000 and then 14,700 levels. Options data suggested a wider trading range between 14,400 and 15,200 levels, while an immediate trading range was seen in the 14,600 -15,000 zone.
Bank Nifty opened with a gap up, but cascaded down from its opening level. Banking stocks have been facing pressure and as a result the index tested the 32,750 level. It closed flat to positive with a gain of around 80 points, but formed a bearish candle on the daily scale as it closed below the opening mark. Now the index has to hold above 32,750 level to witness a bounce towards 33,333 and 33,500 levels, while support on the downside exists at 32,500 and 32,250 levels.
Nifty futures closed positive at 14,860 level with 0.61% gains. Among specific stocks, the trade setup looked bullish in Nalco, NMDC, SAIL,
, Vedanta, Hindalco, Glenmark, JSW Steel, , , and McDowell but weak in SRF, Deepak Nitrite, Jubilant Foodworks, PEL, Federal Bank, MRF and M&M Finance.
(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)
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