F&O: Option data points to wider range of trading at 11,750-12,200

NSE Nifty started the week on a negative note and traded with a negative bias in the first half of the session. However, it managed to above hold crucial support of 11,850 and rebounded towards the fag end to close near 11,900. The index consolidated in a narrow range of 75 points and formed a small bodied candle on the daily scale as dips were being bought into while hurdle remains intact at higher levels.

The index has been respecting the 11,850 level from the past eight sessions, and now it needs to continue to hold above the same to witness an upmove towards 12,035 and then 12,103. On the downside, supports are seen at the 11,780-11,750 zone.

On the monthly options front, Maximum Put open interest was at 11,600 followed by 11,500 strike while maximum Call open interest was at 12,000 followed by 11,800 strike. We have seen Marginal Call writing at 12,200 followed by 12,300 strike while Put Unwinding was seen at all the immediate strike. Options data suggests a broader trading range between 11,750 and 12,200 levels.

India VIX moved up by 2.46 per cent to the 16.25 level.

Bank Nifty continued its outperformance against the benchmark indices and extended gains towards 31,200. The index formed a bullish candle on the daily scale with gains of more than 350 points as buying interest was seen for most part of the session. It managed to close above its previous swing high and thus gave a breakout from Horizontal trend line on the daily scale. Supports are gradually shifting higher and now it has to continue to hold above 30,800 to witness an upmove towards 31,500 while on the downside, supports are seen at 30,800 and then 30,600.

Nifty futures closed flattish at 11,946. Builtup of long positions were seen in Amara Raja Batteries, RBL Bank, Ashok Leyland, Jindal Steel and IGL, while shorts were seen in Equitas, Indigo, Balkrishna Industries, Cipla and Pidilite.

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