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    F&O: Nifty structure weak, but VIX suggests limited downside

    Synopsis

    Nifty has to hold above 11,250 level to witness an up-move towards the 11,350-11,400 zone while on the downside support exists at 11,150 and then 11,100 levels.

    By Chandan Taparia

    Nifty opened positive on Monday but failed to hold above 11,250 level and drifted towards the 11,150 zone. However, it saw a solid good recovery of around 100 points from lower levels to close near its opening zone. The index ended the session with a gain of around 70 points, and managed to recover half the losses made of last session.

    The index formed an Inside Bar pattern on the daily scale, as it traded inside the trading range of the previous session, which indicated that declines are being bought into and the major trend could remain intact. Now, Nifty has to hold above 11,250 level to witness an up-move towards the 11,350-11,400 zone while on the downside support exists at 11,150 and then 11,100 levels.

    India VIX fell 1.67 per cent to 21.30 level. Volatility fell after last Friday’s bounce and the overall lower choppiness suggested limited downside and support-based buying could again emerge at lower levels.

    Maximum Put open interest stood at strike price 11,000 followed by 10,000, while maximum Call OI was at 11,500 followed by 12,000 levels. Minor Call writing was seen at 11,900 and 11,600 levels while there was Put writing at strike prices 11,200 and 11,000. Options data suggested an immediate trading range between 11,000 and 11,400 levels in the coming few days.

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    Bank Nifty opened positive but failed to cross the 22,000 mark and drifted towards 21,400 level. However, it witnessed some recovery from lower levels and closed near to its 50-day EMA. The index closed the session on a positive note with marginal gains of around 20 points, but formed a bearish candle as it closed lower than its opening level. Now it has to cross and hold above the 22,000 mark to witness an up-move towards 22,250 and 22,500 levels. On the downside, the immediate support was seen at 21,500 and then 21,250 levels.

    Nifty futures closed positive at 11,278 level with a gain of 0.82 per cent. The trade setup looked strong in Motherson Sumi, Escorts, Jindal Steel, Hero MotoCorp, Hindalco, Bajaj Auto, TechM, Coal India, Mindtree and Amara Raja Battery, but it was weak in MRF, Bharti Airtel, SBI, Ramco Cement, MGL and BPCL.

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



    (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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