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F&O: Nifty hurdles shift lower in signs of further weakness ahead

India VIX fell 2.12 per cent to 14.29 level.

ETMarkets.com|
Updated: Dec 10, 2019, 05.12 PM IST
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F&O: Nifty forming higher highs & lows; supports shifting higher
Nifty futures closed negative at 11,903 with a 0.53 per cent loss.
By Chandan Taparia

Nifty opened with marginal gains on Tuesday, but started correcting from the word go and ended the session forming a Bearish Belt Hold candle on the daily chart. The index faced resistance around the 20 DEMA and continued to make lower lows throughout the day.

It formed lower highs and lows for the third consecutive session and closed below its immediate support at 11,888 level, which doesn’t bode well for the bulls. Now, we may see the continuation of the ongoing corrective move towards its next support at 11,800 and then 11,700 levels. On the upside, resistance shifted lower towards 11,950 and 12,050 levels.

In monthly options, maximum Put open interest was seen at strike price 11,500 followed by 12,000, while maximum Call OI was at 12,000 followed by 12,200 level. Some Call writing was seen at strike prices 11,900, 12,000 and 12,200, while there was marginal Put writing at strike prices 11,900 and 11,500, followed by unwinding at strike prices 12,000 and 12,100. Options data suggested a trading range between 11,700 and 12,100 levels.

India VIX fell 2.12 per cent to 14.29 level.

In line with the benchmark indices, Bank Nifty started correcting from initial trades and formed a Red Body Candle on the daily chart. The banking index moved within Monday’s trading range and thus formed an Inside Bar pattern on the daily chart. It closed below the 20 EMA on the daily chart. As long as it sustains below its resistance zone between 31,500 and 31,600 levels, a corrective move towards the 31,000 – 30,800 range cannot be ruled out.

Nifty futures closed negative at 11,903 with a 0.53 per cent loss. There was long buildup in Hindustan Unilever, Bharti Airtel and Bajaj Finance, while shorts were seen in Apollo Tyre, RBL Bank, GAIL, NBCC and ZEEL.

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

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