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F&O: Nifty must top 11,923 to extend gains towards 12,000-12,035

India VIX eased 6.39% to 13.37. Lower volatility is likely to attract support-based buying.

ET CONTRIBUTORS|
Dec 11, 2019, 05.13 PM IST
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On the monthly options front, maximum Put open interest (OI) was at 11,500 followed by 12,000 strike
By Chandan Taparia

NSE Nifty witnessed a volatile session, as it fell to the 11,832 level, but managed to recover in the last hour to close above 11,900. The headline index formed lower highs and lower lows for the fourth straight session, but made a bullish candle on the daily scale on Wednesday.

Selling may halt now, as the index respected its key support area of 11,800 after a decline of 300 points due to profit taking from its lifetime high of 12,158. The index needs to negate formation of lower lows of last four sessions by surpassing 11,923 to witness an upmove towards the 12,000-12,035 zone. On the downside, major support exists at 11,800.

On the monthly options front, maximum Put open interest (OI) was at 11,500 followed by 12,000 strike, while maximum Call OI was at 12,000 followed by 12,200 strike. We have seen mainly Call and Put writing at 11,900 strike, which indicates a rangebound bias in the range of 100 points. Option data suggests a wider trading range between 11,700 and 12,100 in the coming weeks.

India VIX eased 6.39 per cent to 13.37. Lower volatility could support the index to attract support-based buying with rangebound bias.

Bank Nifty continued its lower highs and lower lows formations of last four sessions, but managed to recover by around 300 points from the support of 31,000 in the last hour. Now it has to cross and hold above 31,333 to witness a move towards 31,500 and then 31,800. On the downside, supports are seen at 31,000 and then 30,800.

Nifty futures rose 0.35 per cent to 11,940. Builtup of long positions were seen in L&T Finance Holdings, DLF, Mindtree, IGL, HDFC and Bajaj Finserv while shorts were seen in Ujjivan, YES Bank, Havells, Heromotoco and L&T.

(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
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