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F&O: Nifty negates lower highs and lows; supports shift higher

Nifty managed to hold the opening gap and formed a bullish candle on the daily chart.

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Last Updated: Dec 12, 2019, 04.44 PM IST|Original: Dec 12, 2019, 04.44 PM IST
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Nifty futures closed with a gain of 0.70 per cent at the 12,021 level.
By Chandan Taparia

NSE Nifty opened positive and witnessed sustained buying interest towards the 12,000 level on Thursday. The index negated formation of lower highs and lower lows of the last four sessions, and supports were seen shifting higher.

The 50-stock pack managed to hold the opening gap and formed a bullish candle on the daily chart. The momentum oscillator Relative Strength Index (RSI) also turned bullish and was on the verge of giving a positive crossover with its average.

Going forward, till Nifty holds above 11,900, we may see the continuation of rally towards 12,035 and 12,100 levels. On the flipside, strong support remained at 11,900 and then 11,800.

On the monthly options front, maximum Put open interest was at 11,500 followed by 12,000 strike, while maximum Call OI stood at 12,000 followed by 12,200 strike. We witnessed marginal Call writing at 12,000 strike, while decent writing was seen at 12,000 and 11,900 Put options. Options data suggests a wider trading range between 11,700 and 12,100 level for the coming weeks.

India VIX fell 0.24 per cent to the 13.34 level. Lower volatility would help the index attract support-based buying interest with a rangebound bias.

Bank Nifty negated the formation of lower highs and lower lows of the last four sessions and continued its positive stance towards the 31,700 level. The index formed a Bullish Belt hold pattern on the daily scale and closed with a decent gain of around 400 points. The banking index rebounded from its strong support of 31,000 and outperformed benchmark indices. Till the time it sustains above immediate support of 31,333, we maintain our positive stance for an upmove towards 32,000-32,200 in coming sessions.

Nifty futures closed with a gain of 0.70 per cent at the 12,021 level. Builtup of long positions were seen in Indiabulls Housing Finance, Tata Motors, Manappuram, Tata Global and Tata Steel, while shorts were seen in Ujjivan, Jindal Steel, Equitas, IGL and Infosys.

(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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