F&O: Every bounce getting sold into; below 11,761, Nifty capped
Bank Nifty failed to surpass the 30,700 level and drifted towards its crucial support at 30,250.
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Nifty50 formed a High Wave candle along with the formation of an Outside Bar and remained highly volatile in a 175-point range on Wednesday. It broke previous day’s low and surpassed the previous day’s high, but finally closed on a flat note. However, every bounce is getting sold into while every minor dips are getting bought into.
The index is trying to respect its 50-day EMA for last three sessions on a closing basis. As long as it holds below 11,761 level, the upside will remain restricted. But a hold below 11,666 level could open Nifty to declines towards 11,600 and then 11,550 levels.
On the options front, maximum Put open interest was at 11,500 followed by 11,700 levels, while maximum Call OI was at 12,000 followed by 11,800 level. There was Call writing at 11,800 followed by 11,700 levels while Put writing was seen at 11,700. Options data suggested a trading range between 11,500 and 11,929 levels.
India VIX moved up 0.89 per cent to 14.73 level. Market volatility was visible even at lower VIX levels because of volatile swings in midcaps and smallcaps.
Bank Nifty failed to surpass the 30,700 level and drifted towards its crucial support at 30,250. It has been respecting to its 50-day EMA for last three sessions, but followup action was missing near the resistance zone.
As long as it remains below the 30,600- 30,700 zone, weakness could persist, while a drift below 30,250 level could open it up for further decline towards 30,000 and then 29,850 levels.
Nifty futures closed positive at 11,720 with a marginal gain of 0.17 per cent. There was long buildup in PowerGrid, CanFin Homes, Hexaware and Voltas while shorts were seen in IRB, L&T Finance, BEML and Piramal Enterprise.
(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)