F&O: Bulls likely to hold sway in Dalal Street in the near term

By Chandan Taparia

The Nifty50 index opened in the positive at a new lifetime high of 11,495 on Thursday and consolidated through the entire session. It has been making higher tops and bottoms for the past few sessions and every small decline is being bought into, as supports have shifted higher gradually.

Now Nifty has to hold above 11,435 to extend its move towards 11,500 and then 11,600 levels, while on the downside, support is seen at 11,350 and then 11,300 levels.


On the options front, maximum Put open interest was at 11,000 followed by 11,300 while maximum Call OI was at 11,500 followed by 11,600. There was Put writing at strike price 11,400 followed by 11,500, whereas marginal Call writing was seen at strike prices 11,700 and 11,600.

India VIX moved up 1.10 per cent to 12.67. Overall lower volatility suggests the bulls are likely to control the market in the near term.

Bank Nifty has been making higher highs and higher lows for last four sessions and made a new lifetime high at 28,363 on Thursday. It formed a bullish candle on the daily scale and outperformed the broader index. Now, it has to continue to hold above 28,128 to extend its move towards 28,500 level.

Nifty futures closed in the positive with a 0.15 per cent gain at 11,484. Long buildup was seen in Page Industries, PC Jeweller, ACC, ICICI Bank, Star, Axis Bank, Bank of India and SBI while shorts were seen in Cummins India, Engineers India, KPIT, Hexaware, MRF, Bharat Forge and Kotak Bank.

(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)