F&O: Bulls in total control, Options peg trading range at 12,700-13,500

Nifty opened positive on Friday and continued its winning streak to make yet another lifetime high at 13,280 level. During the session, the index witnessed a drop towards the 13,150 level, which saw smart buying and the index finally registered the highest close with a gain of more than 120 points.

The index formed a bullish candle on both daily and weekly charts, and continued to form higher highs and lows since the last five sessions. Now, it has to hold above 13,100 level to witness a bounce towards 13,400 level, while on the downside, major support exists at 13,000 level.

India VIX slipped 5.12 per cent from 19 to 18.02 levels. Lower volatility level is the new normal and suggests that the bulls are holding a grip. Any decline could be bought in the market.

On the options front, maximum Put open interest stood at 12,000 followed by 13,000 levels, while maximum Call OI was at 13,000 followed by 13,500 levels. Marginal Call writing was seen at 13,300 and then 13,600 levels, while there was Put writing at 13,200 and then 13,000 levels. Options data suggested a wider trading range between 12,700 and 13,500 levels, while the immediate trading range is seen between 13,100 and 13400 levels.

Bank Nifty opened positive and continued its northward journey after a small dip. The index respected the previous close of 29,450 level and rallied towards the 30,200 zone, mainly in the second half of the session. It saw the highest daily close in last 192 sessions and settled the day with a decent gain of around 600 points.

The index formed a bullish candle on the daily and weekly scales and has continued to form higher highs and lows since the last five weeks. Now, it has to hold above 29,500 level to witness a bounce towards 30,500 and higher levels, while key support exists at 29,200 level.

Nifty futures closed positive at 13,321 level with 0.98 per cent gain. The trade setup looked positive in Tata Chemicals, IndiGo, Hindalco, ICICI Bank, Sun Pharma, Ultratech Cement, SBI, HUL, Tata Consumers, Axis Bank and Biocon buy weak in Ambuja Cement, Shriram Transport, ACC and RIL.

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