F&O: India VIX drops 3.96%, Nifty trading range shifts to 11,700-12,100 zone

By Chandan Taparia

Nifty50 opened positive on Friday and extended its gains towards the 11,973 mark in the first half of the session. However, profit booking towards the fag end of the session dragged the index below the 11,900 mark.

It formed a Doji candle with a long upper shadow on the daily scale, which indicates the absence of followup buying at higher levels. The index formed a Doji candle for the second consecutive week, indicating indecisiveness among the market participants. Nifty retested the breakdown trend line on the intraday scale and corrected sharply, which restricted upside momentum.

During the week gone by, the index traded in the narrow range of 171 points, which was the narrowest weekly trading range in last six months. Now, it has to hold above 11,850 level to witness an up-move towards 11,950 and then 12,000 levels, while on the downside a major support is seen at 11,780 level.

In monthly options, maximum Put open interest was at 11,600 followed by 11,500 levels, while maximum Call OI was at 12,000 followed by 11,800 levels. There was Call writing at 12,000 followed by 12,100 levels while marginal Put writing was seen at 11,500 and then 11,600 levels. Options data suggested a broader trading range between 11,700 and 12,100 levels.

India VIX fell 3.96 per cent to 15.03 level.

Bank Nifty opened positive and extended the gains towards 31,165 mark, but witnessed some profit booking at higher levels in the last hour of trade. It formed a bullish candle on the daily scale after forming higher highs and lows for past five weeks. Now it has to hold above 30,800 level to witness an up-move towards 31,250 and then 31,500 levels, while a major support on the downside was seen at 30,400 level.

Nifty futures closed positive at 11,940 level with 0.34 per cent gains. Long buildup was seen in Chola Finance, Bharti Airtel, SBI, Canara Bank and Union Bank while shorts were seen in Siemens, IndiGo, IOC, Apollo Hospital, Vedanta.

(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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