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F&O: Nifty50 forms higher highs and lows; market outlook bullish

India VIX moved up by 0.86 per cent to the 13.41 level.

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Dec 16, 2019, 05.03 PM IST
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F&O: Nifty forming higher highs & lows; supports shifting higher
Option data suggests a wider trading range between 11,900 and 12200 levels in the coming weeks.
By Chandan Taparia

NSE Nifty opened gapup on Monday, but failed to hold on to its gains and drifted towards the 12,050 level. The index formed a bearish candle on the daily scale, as minor profit booking dragged the index lower. However, it formed higher highs and higher lows for the third straight session.

The overall trend of Dalal Street is still positive and traders can continue with buy on dips strategy till the headline index above 12,000, from where Nifty can witness an upmove towards its lifetime high of 12,158 and then 12,250. On the downside, support is seen in the 11,950-11,900 zone.

On the monthly options front, maximum Put open interest (OI) was at 12,000 followed by 11,500 strike, while maximum Call OI stood at 12,000 followed by 12,100 strike. We witnessed major Call writing in 12,100 and 12,300 strike, while Put unwinding was seen at all the immediate strikes.

Option data suggests a wider trading range between 11,900 and 12200 levels in the coming weeks.

India VIX moved up by 0.86 per cent to the 13.41 level. Lower volatility could continue to provide support to the index to attract fresh buying interest.

Nifty Bank made a new lifetime high of 32,186, but consolidated in a narrow range of 300 points for most part of the session to close on a flattish note. It formed a small bodied candle on the daily scale, but continued its formation of higher highs and higher lows of the past three sessions. Now the index has to continue to hold above 31,700 to witness an upmove towards 32,186 and then 32,500, while on the downside, supports are seen at 31,500 and then 31,333.

Nifty futures fell 0.47 per cent to 12,084. Builtup of long positions were seen in IGL, Tech Mahindra, Equitas, Aurobindo Pharma and TCS while shorts were seen in RBL Bank, Amara Raja Batteries, Cholamandalam Investment and Finance, ACC and HUL.

(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

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