F&O: Follow-up buying dries up at higher levels; maximum Call OI @16K

Nifty opened positive on Friday and after a decline in the morning, it took support near the 15,770 zone and headed towards 15,900 zone. It failed to hold at higher levels, but still closed with a gain of around 30 points near its opening level. It formed a Doji on the daily scale and a Bullish Hammer on the weekly scale, which indicates that every decline is getting bought into, but follow-up buying is missing at higher levels. Now, Nifty has to hold above 15,800 level to witness a bounce towards 15,962 and 16,000 levels while on the downside support exists at 15,750 and 15,700 levels.

India VIX fell 0.99 per cent from 11.88 to 11.76 level. Every decline in the volatility indicates that the bulls are again holding command and buying interest is seen at every meaningful declines.

On the options front, maximum Put Open Interest was seen at 15,000 followed by 15,800 levels, while maximum Call OI was at 16,000 followed by 15,900. There was Call writing at 16,000 and then 15,900 levels, while Put writing was seen at 15,800 and then 15,700. Options data suggested an immediate trading range between 15,700 and 16,000 levels.

Bank Nifty opened positive and after an early decline took support near 34,400 and managed to surpass its immediate key barrier at 35,000. It formed a bullish candle with a long lower shadow on the daily chart and a Doji sort of candle on the weekly scale, which clearly indicates a tug of war between the bulls and the bears. The index outperformed Nifty on the daily scale and closed above 35,000 level with a gain of around 350 points. Now, it has to hold above 35,000 level to move up towards 35,250 and 35,500 levels, while on the downside support exists at 34,750 and 34,500 levels.

Nifty futures closed positive with a gain of 0.19 per cent at 15,847 level. Among specific stocks, the trade setup looked bullish in Jubilant Foodworks, ICICI Bank, MFSL, Lal Pathlabs, Indiabulls Housing Finance, Wipro, ITC, ACC, SBIN, ICICI Pru, Tata Consumers, TechM, Nestle, DLF and UBL but weak in Indus Tower, Glenmark, Tata Motors, PVR, Bharat Forge, Tata Chemicals, Cadila and HUL.

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