Option data suggest Nifty to trade in 12,000-12,300 range: Chandan Taparia

Chandan Taparia

Benchmark index Nifty consolidated last week and traded in the range of 250 points, between 12,000-12,250 zones. The index found support at 12,000, while 12,250 levels offered stiff resistance.

It formed a Doji candle on the weekly scale indicating a tug of war between bull and bears with some supply at higher zones. At the current juncture, Nifty has got stuck in a range and till the time it holds above 12,000 level, we may see the ongoing optimism with consolidative move towards 12,250 zones.

India VIX fell down by 0.95 percent from 13.75 to 13.62 levels on a weekly basis. VIX has been hovering near the 14 zone and suggests a limited move in the market. On options front, maximum Put OI is at 12,000 followed by 11,800 strike while maximum Call OI is at 12,500 followed by 12,400 strike. Call writing is mainly seen at 12,200 followed by 12,300 strike while Put unwinding is seen at all the immediate strikes. Option data indicates an immediate trading range between 12,000-12,300 zones.

Chandan Taparia

Vice President and Analyst-Derivatives|Motilal Oswal Financial Services

• 'Nifty may be stuck in 11,800-12,300 range again after strong recovery, as volatility cooled off'

• Nifty corrects 586 pts in a week, but traders should refrain from bottom fishing

• Volatility likely to increase ahead of Union Budget, 12,150 crucial for further upside

Bank Nifty witnessed profit booking in the last two trading sessions as it failed to surpass the immediate hurdle of 31,750 zones and corrected by around 900 points as a result. It formed a Bearish candle on daily, as well as on weekly scale, and drifted below its 50 DEMA.

Bank Nifty underperformed the Nifty index and got stuck in broader trading range with limited upside. Now it has to continue to hold above 30,500 zones to witness an up move towards 31,500 then 31,750 zones, while on the downside major support is seen at 30,200 levels.

Stock specific positive setup is seen in HCL Tech, Bharti Airtel, Torrent Pharma, Reliance Industries, Tech Mahindra, Shriram Transport and Tata Global, while weakness was seen in Hero MotoCorp, Mothersumi Systems, IndusInd Bank.

(The author is Vice President, Analyst-Derivatives at Motilal Oswal Financial Services Limited.)

Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.