F&O: Nifty sees higher highs & lows, but forms bearish candle

Nifty opened positive on Thursday and made a new lifetime high of 13,216, but could not hold at higher levels. It corrected by 100 points from higher levels and after a consolidative move finally settled the day with a gain of around 20 points.

The index formed a bearish candle on the daily scale, as it closed below its opening level, but continued to form higher highs and lows for the fourth session in a row. Now, the index has to hold above 13,000 level to witness a bounce towards 13,250 and then 13,400 levels, while on the downside, major support exists at 12,900 level.

India VIX fell 4.57% from 19.90 to 19 levels. Lower volatility suggests the bulls are holding a grip on the market and any decline trigger buying in the market.

On the options front, maximum Put open interest stood at 12,000 level followed by 13,000 while maximum Call OI was at 13,000 followed by 13,500 levels. There was marginal Call writing at strike prices 13,200 and 13,300 while Put writing was seen at 13,000 and then 12,800. Options data suggested a wider trading range between 12,500 and 13,500 levels, while the immediate trading range lies between 12,900 and 13,250 levels.

Bank Nifty opened positive, but descended throughout the session with a rangebound bias even as it formed an Inside Bar on the daily scale. The index marginally recovered in the last hour of the session and closed the day flat. It formed a bearish candle on the daily scale and continued to move sideways. Now, it has to hold above 29,200 level to witness a bounce towards 30,000 and then 30,300 levels while support exists at 29,000 level.

Nifty futures closed positive at 13,200 level with 0.29% gain. The trade setup looked positive in Maruti, Tata Chemicals, PEL, Bharat Forge, PFC, LIC Housing Finance, ONGC, NTPC, SBI, REC, Bajaj Finserv, Asian Paint, Marico, HPCL, Cadila and Siemens but weak in HDFC Bank, HDFC and MFSL.

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