F&O: Higher tops and bottoms signal Nifty remains in a bullish setup

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F&O: Higher tops and bottoms signal Nifty remains in a bullish setup


Nifty opened positive on Thursday, took support at the previous day’s closing level, and extended the gains to hit a fresh all-time high of 14,666 level. The index has been holding on to higher levels and making fresh record highs with its highest daily close above 14,600 level.

The index formed a bullish candle on the daily scale and continued to form higher tops and bottoms since the last two sessions. Now, the index has to hold above 14,500 level to extend its move towards 14,750 and then 15,000 levels, while on the downside, immediate support exists at 14,450 and then 14,250 levels.



India VIX slipped 5.90 per cent from 22.89 to 21.55 levels. Volatility needs to cool down below 20 mark to commence a fresh leg of rally to go into a new lifetime high. However, volatility could be comparatively higher ahead of the Union Budget.

On the options front, maximum Put Open Interest stood at 14,000 followed by 13,000 levels, while maximum Call OI was at 15,000 followed by 14,800 levels. There was Call writing at 15,000 and then 14,800 levels, while there was Put writing at 14,600 and the 14,500 levels. Options data suggested a wider trading range between 14,200 and 15,000 levels, while the immediate trading range lies between 14,500 and 14,800 levels.

Bank Nifty opened flat and moved in a consolidative fashion by buying on declines throughout the session. The positive undertone continues in all the banking stocks and the index closed with a gain of around 100 points. The index formed a bullish candle on the daily scale and continued to form higher highs and lows for the second session in a row. Now, the index has to hold above 32,200 level to witness a bounce towards 32,750 and then 33,000 levels, while on the downside, support exists at 32,000 and 31,750 levels.

Nifty futures closed positive with a gain of 0.44% at 14,633 level. The trade setup looked positive in Apollo Tyre, Mindtree, Tata Motors, MRF, Bank of Baroda, Chola Finance, Bosch, PVR, Jindal Steel, Ashok Leyland, Federal Bank, Maruti, UPL, Asian Paint, RIL, M&M and TCS but weak in Powergrid, McDowell, GAIL, NTPC and IOC.

(
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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