F&O: Lack of followup buying & Put unwinding signal bearish bias
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By Chandan Taparia
The Nifty50 index failed to surpass Thursday’s high and witnessed selling for the most part of Friday’s session. It negated the formation of higher top and higher bottom and corrected towards the 11,420 level. The index formed a Bearish Belt Hold candle on a daily chart, and a Spinning Top on the weekly scale, wh ich implied that followup buying was missing at higher levels.
Now, the 50-pack has to continue to hold above 11,435 to extend its move towards 11,500 level, while a hold below 11,350 could change the immediate trend for a decline towards 11,300 and 11,250 levels.
On the options front, maximum Put open interest was at 11,000, followed by 11,200, while maximum Call OI was at 11,500, followed by 11,600. There was Call writing at strike price 11,500 and marginal Put unwinding at the immediate strike prices.
India VIX moved up 1.34 per cent to 12.85.
Bank Nifty opened flattish but remained highly volatile for the entire session. It formed a Bearish Engulfing Candle on the daily scale, which implied that the bears were putting pressure at higher levels. Now, it has to continue to hold and sustain above 28,000 to extend its move towards 28,333 and then 28,500 levels, while on the downside, supports are seen at 27,750 level.
Nifty futures closed in the negative with 0.46 per cent loss at 11,435. Long buildup was seen in Eicher Motor, PVR, Bata India, Voltas and Exide while shorts were seen in JSPL, Gail, Tata Communications and KPIT.
(Chandan 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 failed to surpass Thursday’s high and witnessed selling for the most part of Friday’s session. It negated the formation of higher top and higher bottom and corrected towards the 11,420 level. The index formed a Bearish Belt Hold candle on a daily chart, and a Spinning Top on the weekly scale, wh ich implied that followup buying was missing at higher levels.
Now, the 50-pack has to continue to hold above 11,435 to extend its move towards 11,500 level, while a hold below 11,350 could change the immediate trend for a decline towards 11,300 and 11,250 levels.
On the options front, maximum Put open interest was at 11,000, followed by 11,200, while maximum Call OI was at 11,500, followed by 11,600. There was Call writing at strike price 11,500 and marginal Put unwinding at the immediate strike prices.
India VIX moved up 1.34 per cent to 12.85.
Bank Nifty opened flattish but remained highly volatile for the entire session. It formed a Bearish Engulfing Candle on the daily scale, which implied that the bears were putting pressure at higher levels. Now, it has to continue to hold and sustain above 28,000 to extend its move towards 28,333 and then 28,500 levels, while on the downside, supports are seen at 27,750 level.
Nifty futures closed in the negative with 0.46 per cent loss at 11,435. Long buildup was seen in Eicher Motor, PVR, Bata India, Voltas and Exide while shorts were seen in JSPL, Gail, Tata Communications and KPIT.
(Chandan 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)
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)