F&O: Nifty structure under pressure to retest the next support at 11,420
On the options front, maximum Put open interest was at 11,300 followed by 11,500 levels.
Nifty opened in negative on Tuesday and drifted towards the 11,460 mark in the first half of the session as it partially filled the bullish gap that had occurred on May 20. The index later recovered from lower levels to close on a flat note near the 11,550 mark. It formed a Hammer candle on the daily scale as some buying interest emerged in the 11,480- 11,500 zone while supply pressure remained intact at 11,600.
As long as it holds below 11,650, Nifty’s immediate structure could remain under pressure to retest the next major support at 11,420, while on the upside, hurdles are seen at 11,720 and then 11,777 levels.
On the options front, maximum Put open interest was at 11,300 followed by 11,500 levels, while maximum Call OI was at 12,000 followed by 11,900 levels. There was Put writing at 11,200 and then 11,300 levels, while Call writing was seen at 11,600 followed by 11,900 levels. Options data suggested a lower trading range between 11,400 and 11,800 levels.
India VIX fell 1.17 per cent to 13.68 level.
Bank Nifty opened negative but traded in a range of 300 points for the entire session. It formed a Doji candle after a sharp decline of past three sessions, which indicated some pause in selling pressure but the index needs to surpass the immediate hurdle to get short-term stability. As long as it remains below 31,000, the index could continue its weakness towards the next major support at 30,250 while on the upside hurdle is seen at 30,850 and then 31,000 levels.
Nifty futures closed negative at 11,550 with a loss of 0.14 per cent. Long buildup was seen in JustDial, BEL, Bank Of India, Bajaj Finserv and IOC while shorts were seen in GAIL, REC, Titan, Concor and PFC.
(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)