F&O watch: Nifty50 continues losing streak; has support at 9,090 and 9,050
By Chandan Taparia
The Nifty50 index continued its losing streak for the third consecutive session on Monday and corrected towards the 9,120 level. The index recovered well from the lower levels and formed a Doji candle on the daily chart, even as it closed near its opening levels.
The occurrence of a Doji pattern after the recent profit booking indicates that followup selling was missing and the decline was being bought into. Now, the Nifty50 has to cross and hold above the 9,165 level to witness an upmove towards 9,218 and 9,250 levels, while on the downside, supports are seen at 9,090 and 9,050 levels.
The index is trading below its support trend line by connecting the lows of 8,712, 8,903 and 9,024 levels but it almost completed its 61.80% retracement of the recent upswing from 9,019 to 9,274 level.
The market formed a negative weekly candle on the previous week, but followup buying has been missing, which has restricted the downside. As per the current setup, the index may see a pricewise or timewise consolidation while there may be stock-specific action in the market.
On the options front, maximum Put OI stood at strike price 9,000 followed by strike price 9,100 while maximum Call open interest was at strike price 9,300, followed by 9,200. Fresh Put writing was seen at strike prices 9,100, 9,000 and 8,900 while Call writing was seen at strike prices 9,100, 9,150, 9,200, 9,250 and 9,300 levels.
Fresh Call and Put writing at most of the nearby strike prices indicated that the market got stuck in the grip of option writers and it would continue to be in this broader trading range over the next few sessions.
India VIX moved up by 2.70% to 11.89 even as lower volatility ruled out any major movement in the market. If the VIX moves above 12.50, only then the bulls will have a worry.
We have seen buildup of long positions in realty, energy and NBFC stocks while selective metals stock have seen buildup of short positions.
(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 continued its losing streak for the third consecutive session on Monday and corrected towards the 9,120 level. The index recovered well from the lower levels and formed a Doji candle on the daily chart, even as it closed near its opening levels.
The occurrence of a Doji pattern after the recent profit booking indicates that followup selling was missing and the decline was being bought into. Now, the Nifty50 has to cross and hold above the 9,165 level to witness an upmove towards 9,218 and 9,250 levels, while on the downside, supports are seen at 9,090 and 9,050 levels.
The index is trading below its support trend line by connecting the lows of 8,712, 8,903 and 9,024 levels but it almost completed its 61.80% retracement of the recent upswing from 9,019 to 9,274 level.
The market formed a negative weekly candle on the previous week, but followup buying has been missing, which has restricted the downside. As per the current setup, the index may see a pricewise or timewise consolidation while there may be stock-specific action in the market.
On the options front, maximum Put OI stood at strike price 9,000 followed by strike price 9,100 while maximum Call open interest was at strike price 9,300, followed by 9,200. Fresh Put writing was seen at strike prices 9,100, 9,000 and 8,900 while Call writing was seen at strike prices 9,100, 9,150, 9,200, 9,250 and 9,300 levels.
Fresh Call and Put writing at most of the nearby strike prices indicated that the market got stuck in the grip of option writers and it would continue to be in this broader trading range over the next few sessions.
India VIX moved up by 2.70% to 11.89 even as lower volatility ruled out any major movement in the market. If the VIX moves above 12.50, only then the bulls will have a worry.
We have seen buildup of long positions in realty, energy and NBFC stocks while selective metals stock have seen buildup of short positions.
(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)
