F&O: Nifty trading range shifts to 10,800-11,300, overall trend bullish

By Chandan Taparia

Nifty opened positive on Thursday but failed to hold above 11,225 level. During the day, the index lost all its gains and drifted towards the 11,050 level. However, it witnessed a bounce from lower levels and closed the session on a flat note.

The index formed a bearish candle, similar to a Spinning Top, which indicated that followup action is missing even after the recovery of last two sessions. The has got stuck in a trading range, where dips got bought into, but supply pressure was clearly visible at key resistance zones.

Now, if it manages to hold above 11,050 zone, then buying interest could emerge towards 11,250 level, while on the downside, support exists in the 10,900-10,880 zone.

India VIX fell 1.06 per cent to 23.56 level. A decline in VIX from recent bounce to 25.69 suggests the bulls are using any decline as a buying opportunity and the overall trend could remain bullish.

Maximum Put open interest stood at 11,000 followed by 10,000 levels, while maximum Call OI was at 11,500 followed by 12,000 levels. Minor Call writing was seen at 11,500 and 11,400, while there was some Put writing at 11,100 and then 10,600 levels. Options data suggested a trading range between 10,800 and 11,300 levels for the coming few days.

Bank Nifty opened positive and headed towards 21,900 level, but failed to hold its recovery and settled the day on flat note near the 21,500 level. The index formed a bearish candle similar to a ‘Shooting Star’ pattern and hovered near the 50-day EMA, which indicated a tug of war at key moving averages.

The technical indicators are turning on neutral zones and it requires a decisive followup to confirm the next momentum. If the index manages to hold above 21,500 zone, then a bounce could be seen towards 22,000 and then 22,250 levels, while on the downside, immediate support is seen at 21,250 and then 21,000 levels.

Nifty futures closed positive at 11,132 level with a gain 0.27 per cent. The trade setup looked positive in Hindaco, Bata India, Tata Motors, Eicher Motor, JSW Steel, Havells, TVS Motor, Cummins India, Titan, Jubilant Foodworks and Maruti, while it was weak in Pidilite Industries and Shriram Transport Finance.

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