F&O: Price formation suggests bearishness; 10,800 level key
On the options front, maximum Put open interest (OI) was at 10,800 followed by 10,600 strike.
NSE Nifty managed to hold the 10,800 level, but consolidated in the 80-point range for most part of the session. The index formed an Inside Bar on the daily scale as it traded inside the trading range of last session.
The headline index has been finding support at lower zones after the decline of the last two sessions while finding hurdle at bounce. Price formation suggests a bearishness, but supports are intact, which is keeping the index in broader trading range.
Now the index needs to hold above 10,800 to witness a bounce towards 10,929 and then 10,950, while on the downside, supports are seen at 10,750 and then 10,700.
On the options front, maximum Put open interest (OI) was at 10,800 followed by 10,600 strike, while maximum Call OI was at 11,000 followed by 11,200 strike. Call Writing was at 11,000 followed by 10,950 strike while Put Writing was seen at 10,800 followed by 10,700 strike. Option data suggests trading range between 10,650 and 11,000.
India VIX fell down by 4.17 per cent at 15.35 level.
Nifty Bank opened positive and managed to hold the previous day’s low, but the bounce was not respected at higher levels. The index formed an Inside bar on the daily scale and ended on a flattish note. Now, it needs to hold above 27,000 to witness a bounce towards 27,500 and then 27,750, while on the downside, supports are seen at 26,850 and then 26,500.
Nifty futures closed with a gain of 0.30 per cent at 10,866. Builtup of long positions were seen in Mindtree, Kajaria Ceramics, BPCL and Kotak Bank while Shorts were seen in NIIT Tech, Pidilite Ind, BEL and REC.
(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)