F&O: Nifty trading range shifts lower to 11,900-12,250 zone

By Chandan Taparia

NSE Nifty started the session on a negative note and corrected sharply from initial trades on Tuesday. The index slumped for a fourth session and fell towards the 11,900 level during the day. However, it staged a smart recovery from the lower levels and finally settled just below the 12,000 mark to form a ‘Hammer’ candle on the daily chart.

If the headline index sustains above 12,031, then it may see a bounce towards 12,150–12,200 zone. On the flip side, immediate support is placed at 11,900 and then 11,830.

On the options front, maximum Put open interest was at 12,000 followed by 11,800 strike, while maximum Call OI stood at 12,200 followed by 12,300 strike. Call writing was mainly seen at 12,200 followed by 12,100 strike, while Put unwinding was at immediate strike with minor Put writing at 11,900 strike. Options data indicated that the trading range shifted lower to 11,900-12,250.

India VIX moved up marginally by 0.62 per cent to the 14.51 level.

Bank Nifty continued to make lower highs and lower lows for a third consecutive session. The banking index saw a sharp correction in the first half. However, it took support around the upper line of the channel pattern and rebounded piercingly in the later half to form a ‘Hammer’ candle on the daily scale. Formation of this candle around the support zone is a sign of relief for the bulls. Now, if Bank Nifty manages to cross 30,700 decisively, then we may see an upmove towards 31,000 and then 31,350. While strong support remained intact in the 30,100–30,200 zone.

Nifty futures fell 0.44 per cent to the 12,020 level. Long builtup was seen in TVS Motors, United Spirits, MFSL, BEL and Oil India, while shorts were seen in YES Bank, Bharti Infratel, LIC Housing Finance, Tata Motors and Balkrishna Indistries.

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