F&O: Nifty trading range shifts to 12,000-12,400 zone

By Chandan Taparia


NSE Nifty opened gapup for a second consecutive session on Wednesday and headed towards the 12,231 level. However, it consolidated for most part of the session, and finally closed a tad above 12,200.

The index has surpassed its immediate hurdle in the 12,150-12,170 zone, and formed a bullish candle on the daily scale. It has been making higher highs and higher lows for the last two sessions, and supports are gradually shifting higher after consolidation in the last couple of sessions.

Nifty now has to hold above 12,150 to witness an upmove towards 12,280 and then 12,350, while major support is at 12,000.

On the options front, maximum Put open interest stood at 12,000 followed by 11,800 strike, while maximum Call OI was at 12,500, followed by 12,400 strike. Put writing was mainly seen at 12,000 and 12,200 strike, while Call unwinding was seen at all the immediate strikes. Option data indicates a wider trading range between 12,000 and 12,400 levels.

India VIX fell 1.86 per cent to the 13.62 level. Volatility has cooling off from the last two weeks, which is supporting the bulls and ‘buy on dips’ strategy in the market.

Bank Nifty managed to close near its immediate hurdle at 31,500 zone and held on to its 50-DEMA for the last two trading sessions. The index has given the highest daily close in the last 19 trading sessions, and formed a small bodied bullish candle on daily chart. It has given a breakout from its trading band of 30,900-31,500, and now needs a followup buying to drive the next leg of rally.

Bank Nifty has to hold above 31,200 to extend its move towards 31,750 and then 32,000, while major support exists in 31,000-30,900.

Nifty futures rose 0.83 per cent to 12,228. Long builtup was seen in PFC, MFSL, Godrej CP, Kotak Mahindra Bank, Escorts, Nestle India and HUL, while shorts in Siemens, Ashok Leyland, Ujjivan, PEL, BHEL, NCC and Idea.

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