F&O: Nifty trading range shifts to 11,900-12,300, but optimism on

By Chandan Taparia


Nifty50 started Tuesday’s session with marginal gains, but it slipped into the negative territory in no time. Once again, we witnessed selling pressure from the very start. While some buying interest in the later half of the day helped the index pare losses and conclude the session a tad below 12,000 mark.

The index made a lower high for the third consecutive session and formed a red body candle on the daily chart. On the hourly chart, a Head & Shoulder pattern breakdown emerged. However, it hovered around the lower end of a Rising Channel. Momentum oscillator RSI indicated a negative divergence on the daily chart. As long as Nifty sustains below the 12,000 – 12,025 zone, we may see profit booking towards 11,850 and 11,800 levels. On the flipside, the 12,158 level remains a major hurdle for the index.

In December monthly options, maximum Put open interest was at 12,000 followed by 11,500 levels, while maximum Call OI was at 12,500 followed by 12,100 levels. There was Call writing at 12,200 and 12,300 levels and Put writing at 11,800. Options data suggested a trading range between 11,900 and 12,300 levels.

India VIX moved up 2.55 per cent to 14.56 level. As long as VIX remains below 15, we may see continuation of the ongoing optimism in the coming days.

Bank Nifty continued the formation of lower highs and lows for last three sessions and drifted towards its key support zone at 31,500. It formed a bearish candle on the daily scale, as selling pressure emerged at higher levels. The index remained in consolidation mode in the latter half of the session.

Resistance levels are shifting lower gradually. As long as it holds below 31,900 level, the index could drift towards 31,400 and then 31,200 levels, while the immediate high of 32,157 would be a major hurdle in the coming few days.

Nifty futures closed negative at 12,050 level with a loss of 0.34 per cent. Long buildup was seen in Torrent Pharma, MFSL, Bajaj Auto, NMDC and Bata India while shorts were seen in YES bank, Bharti Infratel, Jindal Steel, Union Bank and Escorts.

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