F&O: Doji on daily scale, Hammer in weekly chart signal buying in dips

Nifty on Friday opened positive and headed towards the 14,700 level in the first hour of trade. However, the index failed to hold the gains and saw a decline towards 14,600 level in last hour of trade amid profit taking. The index lost most of its intra-day’s gains and closed the session with a marginal gain of 36 points.

It formed a Doji candle on the daily scale and a Hammer on the weekly scale, which indicate that every decline is getting bought into. However, followup buying was missing at higher zones. Now, the index has to hold above 14,500 level for a bounce towards 14,700 and 14,850 levels, while support on the downside exists at 14,350 and 14,250 levels.

India VIX fell 2.33% from 20.89 to 20.40 levels. It needs to hold below 20 level to again attract bullish stance in the market.

On the options front, maximum Put Open Interest stood at 14,000 level followed by 14,500, while maximum Call OI was seen at 15,000 level followed by 15,500. Call writing was seen at 15,200 and 14,900 levels, while there was minor Put writing at 14,500 and 14,000 levels. Options data suggested a wider trading range between 14,250 and 14,850 levels.

Bank Nifty opened positive and headed towards 32,300 level, but failed to hold the gains and came under pressure near a key hurdle at 32,250 level. The banking index failed to outperform Nifty and again started showing nervousness in the absence of followup buying interest.

The index formed a bearish candle on the daily scale and a Bullish Hammer on weekly chart, which signaled a tug-of-war between the bulls and the bears to find a short-term bottom. Now the index has to hold above 32,000 level to see a bounce towards 32,500 and 32,750 levels, while support on the downside can be seen at 31,500 and 31,250 levels.

Nifty futures closed positive at 14,624 level with 0.22% gain. Among specific stocks, the trade setup looked bullish in Glenmark, Hindalco, Aurobindo Pharma, Asian Paint, Cipla, Vedanta, Sun Pharma, Jubilant Foodworks, Apollo Hospital, SRF, M&M, ONGC, TechM, Tata Consumers and Divi’s Labs but weak in PVR, M&M Financial, RBL Bank, REC, Petronet LNG, Canara Bank and L&T.