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Nifty opened on a positive note on Tuesday but failed to hold above 12,150 level and started correcting from initial trades. It continued to form lower lows for most part of the day and formed a Bearish candle on the daily chart. The index carried its negative momentum into the second consecutive session and hovered around its crucial support of 50 EMA on the daily chart.
Going forward, as long as Nifty holds below 12,150 level, it could drift towards the next major support at 11,980 and then 11,929 levels, while on the upside hurdle is seen at 12,150 and then 12,220 levels.
On the options front, maximum Put open interest was at 12,000 followed by 11,500 level, while maximum Call OI was at 12,200 followed by 12,300 level. There was Put writing at 12,050 followed by 11950 level while meaningful Call writing was seen at strike prices 12,100 and 12,050. Options data indicated a shift in the lower trading range from 11,900 to 12,200 levels.
India VIX moved up 0.68 per cent to 17.29. Volatility is likely to stay high ahead of the forthcoming Union Budget 2020.
Bank Nifty opened negative and gradually extended its weakness towards the 30,650 mark. It formed a Bearish Candle on the daily scale for the second consecutive session. It closed near the crucial support at 30,800 level and needs to hold above the same to witness a bounce towards 31,100 and then 31,250 levels, while a hold below the same level may drag it towards its next support at 30,500 and then 30,250 levels.
Nifty futures closed negative at 12,075 with a loss of 0.42 per cent. Long buildup was seen in United Spirits, MGL, SRF, BPCL and IGL while shorts in Torrent Pharma, Bharti Airtel, Page Industries, Vedanta and Siemens.
(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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