F&O: Follow-up buying needed to lift Nifty to new lifetime high

By Chandan Taparia

Nifty50 opened positive and consolidated in a narrow range between 11,666 and 11,700 levels for most part of Friday’s session. However, it witnessed buying in the last hour of trade and extended gains towards 11,760 level.

The index formed a bullish candle on the daily chart followed by Dragon Fly Doji on the weekly scale, which implied the decline is getting bought into.


Nifty is hovering near the crucial 11,760-11,800 zone and some follow-up buying could take it towards the new lifetime high in the 11,900-12,000 zone, while on the downside, support is seen at 11,666 level.

On the options front, maximum Put open interest was at 11,000 followed by 11,500 while maximum Call OI was at 12,000 followed by 12,500. Marginal Call writing was seen at 12,000 followed by 11,800 levels, while there was Put writing at 11,800 followed by 11,700 levels. The option band signified a broader trading range between 11,500 and 12,200 levels.

India VIX fell 6.51 per cent to 21.71 level.

Bank Nifty managed to hold its previous day’s low and witnessed buying interest in the latter part of the session to extend the gains towards the 30,000 mark. It formed a bullish candle on the daily scale followed by Hammer candle on the weekly scale, which indicated buying at lower levels. Now it has to hold and sustain above the 30,000 mark to extend the gains towards 30,250 and then 30,500 levels, while on the downside, support is seen at 29,750 and then 29,500 levels.

Nifty futures closed positive at 11,808 with a gain of 0.66 per cent. There was long buildup in Kotak Mahindra Bank, ICICI Bank, Tata Steel and SRF while shorts were seen in Jet Airways, UBL, Ajanta Pharma and MRF.

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