F&O: Market structure confirms Nifty weakness in medium term
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By Chandan Taparia
The Nifty50 index failed to cross the 11,500 level and remained under pressure for the major part of Tuesday’s session. It witnessed sharp selloff in last hour of trade and slipped towards the 11,275 mark.
The index formed a Bearish Belt Hold pattern on the daily scale, which suggests the bears were holding a tight grip and there was selling pressure at every small bounce.
As long as Nifty holds below 11,380, it may remain under pressure and could drift towards the previous swing high of 11,171, while on the upside, hurdles are seen at 11,333 and then 11,380 levels.
The index had formed a Bearish Engulfing pattern on the weekly scale last week and follow-up selling confirms a weak structure for the market in the medium term. Traders are advised to trade accordingly.
On the options front, maximum Put open interest was at 11,400 followed by 11,500 while maximum Call OI was at 11,800 and then 11,600 levels. Significant Call writing was seen at strike price 11,400 followed by 11,500 while there was Put unwinding at all immediate strike prices.
The option band signified a lower trading band amid a sudden spurt in the volatility index.
India VIX moved up for the second consecutive session and hovered near its 14-week high level, which suggested limited upside for the market.
Bank Nifty breached its crucial support at 27,165 and declined over 400 points to settle near the day’s low point at 26,800. The index formed a Big Bearish Candle on the daily scale and formed lower highs and lows for last three sessions.
As long as it holds below 27,165, the index can slip towards the 26,650-26,500 zone, while on the upside, a hurdle is seen at 27,165 and then a medium-term hurdle near the 27,440 mark.
Nifty futures closed in the negative at 11,331 with a loss of 1.32 per cent. Long buildup was seen in Mindtree, Hexaware, Cummins and Page Industries, whereas shorts were seen in Chennai Petro, Godrej Consumer Products, Muthoot Finance, Sun TV and Adani Enterprise.
(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 cross the 11,500 level and remained under pressure for the major part of Tuesday’s session. It witnessed sharp selloff in last hour of trade and slipped towards the 11,275 mark.
The index formed a Bearish Belt Hold pattern on the daily scale, which suggests the bears were holding a tight grip and there was selling pressure at every small bounce.
As long as Nifty holds below 11,380, it may remain under pressure and could drift towards the previous swing high of 11,171, while on the upside, hurdles are seen at 11,333 and then 11,380 levels.
The index had formed a Bearish Engulfing pattern on the weekly scale last week and follow-up selling confirms a weak structure for the market in the medium term. Traders are advised to trade accordingly.
On the options front, maximum Put open interest was at 11,400 followed by 11,500 while maximum Call OI was at 11,800 and then 11,600 levels. Significant Call writing was seen at strike price 11,400 followed by 11,500 while there was Put unwinding at all immediate strike prices.
The option band signified a lower trading band amid a sudden spurt in the volatility index.
India VIX moved up for the second consecutive session and hovered near its 14-week high level, which suggested limited upside for the market.
Bank Nifty breached its crucial support at 27,165 and declined over 400 points to settle near the day’s low point at 26,800. The index formed a Big Bearish Candle on the daily scale and formed lower highs and lows for last three sessions.
As long as it holds below 27,165, the index can slip towards the 26,650-26,500 zone, while on the upside, a hurdle is seen at 27,165 and then a medium-term hurdle near the 27,440 mark.
Nifty futures closed in the negative at 11,331 with a loss of 1.32 per cent. Long buildup was seen in Mindtree, Hexaware, Cummins and Page Industries, whereas shorts were seen in Chennai Petro, Godrej Consumer Products, Muthoot Finance, Sun TV and Adani Enterprise.
(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.)