F&O: Nifty50 stuck in a narrow range, forms ‘Doji’ candle for 3rd week

By Chandan Taparia


NSE Nifty opened on a flat note on Friday, but soon reversed course and extended losses, as the session progressed. The index fell sharply in the first half of the day, but due to some pullback in the later half, it managed to close a tad above the 11,900 level.

The headline index made a lower high and lower Low and formed a red body candle on the daily chart. For the second straight week, Nifty has traded in a narrow range of 171 points, which is the narrowest weekly range in the last six months. It formed a Doji candle on the weekly scale for the third week in a row, which clearly shows lack of momentum in either direction.

Now, the index has to hold above 11,850 levels to witness an upmove towards 12,000-12,103, while on the downside, major support remains at 11,850 and then 11,780 levels.

On the monthly options front, Maximum Put open interest was at 11,900 followed by 11,800 strike, while maximum Call OI was at 12,000 followed by 12,100 strike. We have seen meaningful Call writing at 12,000 and then 11,950 strike while minor Put writing was at 11,850 and 11,800 strike. Option data suggests a trading range between 11,800 and 12,100 levels.

India VIX fell 0.72 per cent to 14.87. VIX needs to continue to hold below 15 to surpass the recent highs.

Bank Nifty corrected by 0.76 per cent and formed a red body candle on the daily chart. The index, which concluded the week with a marginal gain of 0.33 per cent, formed a Doji candle on the weekly scale. It continued to make higher highs and higher lows for the sixth consecutive week, and thus the overall trend remains positive. Till the time, it sustains above 30,800, we maintain positive stance for an upside momentum towards 31,500–31,800, while next support is below 30,800 is placed at 30,350.

Nifty futures fell 0.51 per cent to 11,913 level. Builtup of long positions were seen in Zee Entertainment, Equitas, Eicher Motors, Bosch and HDFC, while shorts were seen in Infosys, Hexaware, Wipro, Ambuja Cement and TCS.

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