F&O: Nifty50 forms higher lows again, but negates higher highs

Nifty opened flattish on Thursday, saw a slight dip in the initial hour of trade and then bounced back to 14,600 level. It remained rangebound in the second half of the session but managed to close with a gain of around 30 points. The index formed an Inside Bar and a bullish candle on the daily scale with long lower shadow, which indicated that declines were being bought into. The 50-pack continued to form higher lows for the sixth session, but negated the formation of higher highs of last 15 sessions. Now it has to hold above 14,450 level to witness a fresh move towards 14,750 and then 15,000 levels, while on the downside major support exists at 14,300 and 14,200 levels.

India VIX fell 1.13% from 23.29 to 23.02 levels. Volatility needs to cool down below 20 level for the Nifty form a higher base.

On the options front, maximum Put Open Interest stood at 14,000 level followed by 13,000 while maximum Call OI was seen at 15,000 followed by 14,000. There was Call writing at 14,800 and 14,600 levels, while Put writing was seen at 14,500 and then 14,100 levels. Options data suggested a wider trading range between 14,000 and 15,000 levels, while the immediate trading range lies between 14,300 and 14,800 levels.

Bank Nifty opened flattish and remained consolidative for most part of the session. It witnessed some recovery from lower levels in the last hour of trade, but settled the day with a marginal loss of around 50 points. The index formed an all-time high of 32,718 by surpassing the previous high of 32,683 mark. It formed a Doji candle on the daily scale, which indicated a tug of war at the new high territory. Now, the index has to hold above 32,200 level to witness a bounce towards 32,750 and 33,000 levels, while on the downside support exists at 32,000 and 31,750 levels.

Nifty futures closed positive with a marginal gain of 0.19% at 14,633. The trade setup looked positive in Cadila, BPCL, MRF, Lupin, HPCL, TCS, IOC, Dabur, Siemens, Voltas, Godrej Consumers, ITC, Amara Raja Battery and HUL but weak in SAIL, Vedanta, Jubilant Foodworks, Titan, Hindalco and Bajaj Finance.

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