Nifty has to cross and hold above 11,761 zone to extend its move towards 11,850 then 11,929 zones
The Nifty50 failed to continue its positive momentum of June 20 and corrected towards 11,700 zone on June 21.
It formed a 'Bearish Belt Hold' candle and a 'Harami' pattern on the daily scale, as it traded inside the trading range of last sessions. It has recently taken multiple supports near 50 DEMA at 11,650 zone but the absence of buying interest is also visible at 11,850 zone.
It has been moving in a falling Channel from last 15 trading sessions and formed a bearish candle on the daily as well as on the weekly scale, which indicates that bears are restricting its upside momentum.
Nifty now has to cross and hold above 11,761 zone to extend its move towards 11,850 and then 11,929 zones, while a hold below 11,650 zone could negate the short term consolidation for a decline towards 11,550 levels.
India VIX moved up by 5.11 percent from 13.90 to 14.61 levels last week and moved higher after the decline of the last four week.
On the option front, maximum Put open interest (OI) is at 11,700 followed by 11,500 strike while maximum Call OI is at 12,000 followed by 11,800 strike. Meaningful Call writing was seen at 12,000 followed by 11,800 strikes while minor Put writing was seen at 11,650 followed by 11,500 strikes.
Option data suggests an immediate trading range in between 11,600 to 11,900 zones.
Nifty Bank index formed a 'Doji' candle with long lower shadow on the weekly scale while forming a bearish candle on the daily scale, indicating that declines are being bought but the absence of follow up buying interest is missing at higher zones.
Now it has to continue to hold above 30,600 zone to extend its move towards 31,000, while on the downside multiple supports are seen at 30,250 zone.The stock-specific positive view is seen on ICICI Bank, State Bank of India, Bajaj Finance, Voltas, PFC, ICICI Prudential, Titan Company, Bata India, Tata Global, L&T, while weakness in seen on PVR, Jubilant Foodworks s well as a couple of small and midcap stocks.
(The author is Associate Vice President | Analyst-Derivatives at Motilal Oswal Financial Services Limited)
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