Nifty support zone seen at 4700-4800

Nifty February Futures opened the week at 4837.90 levels and showed short-covering on Tuesday and Wednesday, after making weekly low at 4777.05 levels. The February Futures made a weekly high at 4927.90 levels. However, bulls could not sustain near the resistance level of 4950. Long unwinding was seen on Friday, as Nifty February futures closed with a 40.85-point loss with a 6.55% decrease in OI and 1.05-pt premium.

Since the beginning of the week, maximum OI has been seen in 5000-4900 calls. On Friday, short build-up was seen in 5000 & 4900 Calls with 0.50 and 13.02% increase in OI, respectively, which shows crucial resistance to continue from 4900-5000 zones.

On the ‘Put’ side, the maximum OI has been seen in 4800-4700 Puts. On Friday, the short-covering was seen in 4800-4700 Puts. The Nifty 200-DMA also trading just above 4700 levels. A combination of ‘Call/Put’ data, along with 200 DMA, show an important support zone at 4700-4800 levels and a resistance zone at 4900-5000 levels.

PCR (V), after making high at 1.11 on Wednesday, has made low at 0.94 on Friday, which shows trading activities have been shifting towards the call-shorting side. India VIX is also trading at 31.9, which shows increasing ‘volatility’ and ‘fear level’ from resistance near 4950.

Puneet Kinra, Sr Tech Analyst-Equity Research, Bonanza Portfolio