F&O: Nifty50 negates formation of lower highs of 3 sessions, heading towards 9,250
By Chandan Taparia
The Nifty50 index managed to find support near its 13-day EMA and formed a Bullish Engulfing pattern on the daily chart. It has crossed and closed above the previous day’s high of 9,225 and gave the bulls a grip on things.
The Nifty50 negated the formation of lower highs of last three sessions and it now needs to hold above 9,250 to witness a fresh upward move towards 9,280 and then 9,350 levels, while on the downside, supports are seen at 9,191 and 9,170 levels.
The index is also respecting its support trend line by connecting the lows of 8,712, 8,903 and 9,024. Recently, the Nifty50 took support at this rising support trend line and witnessed a strong recovery for most part of the session.
On the options front, maximum Put open interest was seen at strike price 9,000 followed by 9,100 while maximum Call open interest stood at strike price 9,500 followed by 9,400. Significant Put writing was seen at strike price 9,200, which is supporting the market on decline, while Call unwinding was seen at strike prices 9,200, 9,300, 9,400 and 9,500, which gave comfort to the bulls.
If there is fresh Put writing at strike price 9,300, only then can this rally extend and the market head towards new highs.
The Bank Nifty witnessed a strong move of around 1 per cent and registered a fresh lifetime high of 21,753. It has surpassed a hurdle at 21,700 and saw the highest daily close. Now, if it holds above 21,700, it may take the index towards 22,000 level, while on the downside, supports are seen at 21,400 and then 21,250 levels.
India VIX fell 1.94 per cent to 11.39 and falling volatility started to support the overall bullish undertone of the market.
Most of the banking and tyre stocks witnessed buildup of long position and this can extend their uptrend.
(Taparia is Technical & Derivative Analyst at Motilal Oswal Securities. Investors are advised to consult financial advisers before taking an investment calls based on these observations)
The Nifty50 index managed to find support near its 13-day EMA and formed a Bullish Engulfing pattern on the daily chart. It has crossed and closed above the previous day’s high of 9,225 and gave the bulls a grip on things.
The Nifty50 negated the formation of lower highs of last three sessions and it now needs to hold above 9,250 to witness a fresh upward move towards 9,280 and then 9,350 levels, while on the downside, supports are seen at 9,191 and 9,170 levels.
The index is also respecting its support trend line by connecting the lows of 8,712, 8,903 and 9,024. Recently, the Nifty50 took support at this rising support trend line and witnessed a strong recovery for most part of the session.
On the options front, maximum Put open interest was seen at strike price 9,000 followed by 9,100 while maximum Call open interest stood at strike price 9,500 followed by 9,400. Significant Put writing was seen at strike price 9,200, which is supporting the market on decline, while Call unwinding was seen at strike prices 9,200, 9,300, 9,400 and 9,500, which gave comfort to the bulls.
If there is fresh Put writing at strike price 9,300, only then can this rally extend and the market head towards new highs.
The Bank Nifty witnessed a strong move of around 1 per cent and registered a fresh lifetime high of 21,753. It has surpassed a hurdle at 21,700 and saw the highest daily close. Now, if it holds above 21,700, it may take the index towards 22,000 level, while on the downside, supports are seen at 21,400 and then 21,250 levels.
India VIX fell 1.94 per cent to 11.39 and falling volatility started to support the overall bullish undertone of the market.
Most of the banking and tyre stocks witnessed buildup of long position and this can extend their uptrend.
(Taparia is Technical & Derivative Analyst at Motilal Oswal Securities. Investors are advised to consult financial advisers before taking an investment calls based on these observations)
