F&O: Bulls have a tight grip on this market; Nifty eyes 11,150

By Chandan Taparia

The Nifty50 index continued its upward move for the fifth consecutive session and made a new lifetime high of 11,092 on Tuesday.

It has been making higher highs and higher lows since last four trading sessions, and supports have gradually shifted higher. It formed a bullish candle with a runaway gap on the daily scale, and the bulls had a tight grip beyond the psychologically important 11,000 mark.


Now the index has to continue to hold above 11,000 level to extend its move towards 11,150 and then 11,250 levels, while on the downside, support exists at 10,888 level.

On the options front, maximum Put open interest stood at 10,500, followed by strike prices 10,600 and 10,700 while maximum Call OI shifted to 11,200 followed by 11,100. We have seen significant Put writing at 11000, 11100 and 11050 strikes, which shifted Nifty’s support to higher levels, whereas Call writing at 11,200 and 11,150 is creating scope for the Nifty to move up further. The option band signifies a trading band between 11,000 to 11,250 levels.

India VIX moved up 5.40 per cent to 16.22.

Bank Nifty made a new lifetime high of 27,422 and saw the highest daily close beyond 27,350 level. It formed a bullish candle and momentum was seen on most private and PSU bank counters.

Now, the Nifty50 has to continue to hold above 27,000 to extend its move towards 27,500 and then 27,750 levels, while on the downside, major support exists at 26,850 level.

Nifty futures closed in the positive with a gain of 1.07 per cent at 11,085. Long buildup was seen in Bharat Financial, ONGC, DishTV, TechM, HCL Tech, Axis Bank, Infosys, Hindalco, Bank of Baroda, ITC and Petronet LNG, while shorts were seen in ZEEL, Bharti Infratel, Concor, Ambuja Cement, Eicher Motors, Apollo Hospital and Cadila Healthcare.

(Chandan Taparia is Technical & Derivative Analyst at Motilal Oswal Securities. Investors are advised to consult financial advisers before taking an investment calls based on these observations)