Markets

F&O: Nifty needs to top 10,330 to make a move towards new lifetime high

By Chandan Taparia

Nifty witnessed another high swing day, as it fell down towards 10,141, but managed to recover from the lows and headed towards 10,276.

It continued with its lower high lower low formation for the third consecutive session, but formed a Bullish Hammer candle on daily chart. The index witnessed strong recovery and momentum in the second half of the session and closed with a gain of around 60 points.

Overall the index has got stuck in a broader trading range of 10,033 to 10,409 and is now trading at the middle of the band.

The NSE benchmark has to hold above 10,300-10,330 zones to witness an upmove towards fresh lifetime of 10,490 while on the downside supports are seen at 10094 then 10033 marks.

On the option front, maximum Put open interest is at 10000 followed by 9800 strike while maximum Call OI is at 10500 followed by 10400 strike. We have seen fresh Put writing at 10000 while Call writing is intact at 10400 and 10500 strikes.

India VIX moved up by 2.93% at 16.40. VIX is at highest levels in the last ten month. Rising Volatility is ruling out for any smooth ride in the market and expecting swings to continue going forward for next coming sessions. Index and VIX has negative co relation so requires a cool off in volatility to get some stability.

Bank Nifty managed to hold 24800 zones and headed towards 25200 zones. It also formed a Hammer candle on the Daily chart and requires a decisive hold above 25250 zones to extend its move towards 25500 then 25700 zones.

Nifty Future closed with the gains of 0.69% at 10285. Built up of long position were seen in DCB Bank, M&M, Wockpharma, Godrejind, Havells, Apollo hospital, BPCL, TVSMotor and Hindpetro while shorts were seen in Justdial, TCS, Amar Raja Battery, India Cement, ACC, Federal Bank, BEML, Apollotyre, Britania and STAR.

(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)

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