F&O: Nifty forms a small-bodied candle, suggests buying interest

India VIX fell 2.28 per cent to 13.70 level.

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Nifty futures closed negative at 12,082 with a loss of 0.49 per cent.
By Chandan Taparia

Nifty started Thursday’s session on a flat note and moved higher towards the 12,150 level in the first half of the session. However, profit booking emerged in the later half and, as a result, the index trimmed all the intraday gains and formed a Red Body Candle on the daily scale.

Nifty ended the truncated week with a marginal loss of 0.27 per cent and formed a small-bodied candle with a long lower shadow on the weekly timeframe chart, which indicates that every dip got bought into. Momentum oscillator RSI has been moving sideways on both daily and weekly scales, and thus, they do not suggest any trending move in the coming days. Considering the overall chart structure, we expect Nifty to move in a broader range between 11,900 and 12,250 levels in the ongoing series.


At its current juncture, Nifty’s positive implication of a Bullish Island Reversal pattern is still intact. As long as, Nifty holds above 12,030 level, we would maintain our positive stance for a bounce towards 12,200 and then 12,300 levels. On the flip side, major support is placed at 12,030 and then 11,900 levels.

On the options front, maximum Put open interest stood at 12,000 followed by 11,800 levels, while maximum Call OI was at 12,200 followed by 12,300 levels. There was Put Writing at 11,900 followed by 11,800 levels, while Call writing was seen at 12,200 and then 12,100 levels. Options data indicated a trading range between 11,900 and 12,250 levels.

India VIX fell 2.28 per cent to 13.70 level.

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Bank Nifty opened negative, but managed to recover from lower levels and extended its gains towards the 31,100 mark. It relatively outperformed the benchmark index and formed higher highs and lows for last two sessions. It formed a small-bodied candle on both daily and weekly charts with a long lower shadow, which suggests the emergence of buying interest at lower levels.

Now, Bank Nifty needs to hold above 30,600 level to witness an up-move towards 31,300 and then 31,500 levels, while on the downside, strong support remains intact at 30,500 and then 30,250 levels.

Nifty futures closed negative at 12,082 with a loss of 0.49 per cent. Long buildup was seen at MFSL, Shriram Transport Finance, Muthoot Finance, Zee Entertainment and Indiabulls Housing Finance, while shorts were seen in Escorts, IGL, Cipla, Hindustan Unilever and HPCL.

(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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