F&O: Option band suggests Niftys trading range at 10,700-11,000 levels

By Chandan Taparia

Nifty50 failed to cross the previous days high, but remained rangebound for most part of the session on Thursday. The index formed a bearish candle on daily scale, but respected the 10,800 level.

Now, the index needs to continue to hold above the 10,750-10,777 zone to witness an upmove towards 10,925, and then crucial hurdle at 10,985 level.

Nifty has been facing resistance at its immediate supply trend line by connecting swing high of 10,985, 10,923 and 10,880 levels. The index now require a decisive range breakout to commence the next leg of rally.

On the downside, if it fails to hold the 10,777-10,750 zone, then we can see a small dips towards 10,650-10,600 zone.

On the option front, maximum Put open interest stood at at 10,500, followed by 10,000 strike, while maximum Call OI was at 11,000 followed by 11,200 strike. Put writing was seen at 10,800 followed by 10,900 strike, while Call writing stood at 11,000 followed by 11,400 strike.

Option band signifies a broader trading range in between 10,700 and 11,000 zones.

India VIX marginally moved up by 0.26 per cent to 15.31 level. VIX has to continue to hold below the 16 zone to again get a bounce in the market.

Nifty Bank formed a Bearish Belt Hold candle and an Inside Bar on the daily scale, as it traded within the range of the previous session. However, it slightly fell down from the higher levels, but still held above the previous breakout zones of 27,350 and 27400.

Now, the index has to continue to hold above the 27,350-27,400 zone to extend gains towards 27,750 then 28,000, while on the downside support exists at 27150-27000 zone.

Nifty future closed in the negative with a marginal loss of 0.22 per cent at 10,853 level. Built up of long positions were seen in Torrent Pharma, Amara Raja Battery, Muthoot Finance and Bata India, while shorts were seen in HPCL, Mindtree, Ambuja Cement and McDowell.

(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)

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