F&O: Option band suggests Nifty’s trading range at 11,550 to 12,250 levels

By Chandan Taparia

NSE Nifty opened positive on Friday, but failed to surpass its intraday record high of 12,041 and remained highly volatile throughout the session.

During the day, the index fell down sharply towards the 11,830 level, but recovered to close with a loss of 20 points. Nifty formed a bearish candle with a long lower shadow on the daily scale and a small bullish candle on the weekly chart.


The 50-stock pack has been consolidating in 11,800 to 12,041 range from the last five sessions and requires a decisive breakout to extend gains towards new lifetime high.

Now Nifty has to hold 11,850 zone to witness an upmove towards 12,000 and then 12,041 zone. On the downside, supports are seen at 11,850 and then 11,761.

On the options front, maximum Put open interest stood at 11,500 followed by 11,000 strike while maximum Call open interest was at 12,500 followed by 12,000 strike.

We have seen Put writing at 11,500 and 11,700 strikes while Call writing was seen at 12,200 and 12,400 strikes. Option data suggests a wide trading range in 11,550-12,250 zone.

India VIX rose 2.93 per cent to the 16.06 level. Overall decline in VIX suggests short-term stability and formation of a higher base.

Nifty Bank opened positive and made a new lifetime high of 31,783, but failed to hold on to gains and drifted sharply towards 30,600. However, it recovered from lower levels and closed above 31,350. The index formed a bearish candle with a long lower shadow on the daily scale and a long-legged candle on the weekly scale, which suggests a state of confusion at higher levels. Now Nifty Bank has to hold 31,150 to witness an upmove towards 31,783 and then 32,000, while major support exists at 31,000 and then 30,500 levels.

Nifty futures fell 0.46 per cent to the 11,921 level. Built-up of long positions were seen in Berger Paints, Shriram Transport, Ujjivan Finance and Havells, while shorts were seen in NCC, Apollo Tyres, PC Jewellers and Arvind.

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