F&O: Bulls seem to be returning, but Bank Nifty showing all bearish signals

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F&O: Bulls seem to be returning, but Bank Nifty showing all bearish signals


Nifty opened flat on Monday and moved slightly downwards, but managed to hold support at 14,600 level. The index recovered well from lower levels in the second half of the session as the bulls were seen to be returning to the market. The index traded near its 50 DMA and settled the session flattish near its opening mark.

It formed a Doji sort of candle on the daily scale and negated the formation of lower highs of the past few sessions. Now, it has to hold above 14,700 level to witness a bounce towards 14,900 and 15,000 levels, while on the downside immediate support exists at 14,600 and then 14,450 levels.

India VIX rose 2.51% from 19.99 to 20.49 levels. VIX needs to cool down below 20 level for the bullish grip to continue and the market to see a smoother move.

On the options front, maximum Put open interest stood at 14,500 level followed by 14,000, while maximum Call OI was seen at 15,500 followed by 15,000 level. Call writing was seen at strike prices 15,500 and 15,000 while there was Put writing at 13,600 and then 14,700 levels. Options data suggested a wider trading range between 14,350 and 15,000 levels.

Bank Nifty opened negative and weakness pulled it to 33389 level in the initial half of the day. However, some recovery emerged thereafter. The index ended the day with a loss of around 500 points. It has been underperforming Nifty for the past few sessions. It formed a bearish candle on the daily chart but negated the formation of lower highs of last five sessions. Now it needs to hold above 34,000 level to witness a bounce towards 34,500 and 35,000 levels, while on the downside support exists at 33,333 and 33,000 levels.

Nifty futures closed flattish at 14,758 level. Among specific stocks, the trade setup looked bullish in Adani Enterprises,

, Chola Finance, Godrej Consumers, UBL, Britannia, Dabur, ITC, TCS, HUL, ACC and but weak in , PVR, NMDC, L&T Finance and Bajaj Finance.

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





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