Option data suggests a shift in lower trading range in between 11,000 to 11,600 levels
Nifty index opened positive but failed to hold its gains at higher zones and corrected by over 200 points from its intraday high of 11,400 levels.
It formed a bearish candle on daily and weekly scale as sustained selling pressure was seen at higher levels and it has also broken its 200 DEMA to close below 11,200 levels.
Resistance is gradually shifting lower and now till it holds below 11,250 levels it could extend its weakness towards 11,111 then 11,050 levels while on the upside hurdle is seen at 11,250 then 11,333 levels.
India VIX moved up by 9.12 percent from 16.11 to 17.58 levels. On the options front, maximum Put open interest is at 11,000 followed by 11,200 strike while maximum Call open interest is at 11,500 followed by 12,000 strike.
Call writing was seen at 11,500 followed by 11,800 strike whereas marginal Put writing was seen at 11,000 then 11,200 strike. Option data suggests a shift in lower trading range in between 11,000 to 11,600 levels.
Bank Nifty failed to hold its gains above 28,700 levels and corrected nearly 1,000 points to close below 27,750 levels.
It formed a big bearish candle on daily as well as on weekly scale as sustained selling pressure was seen at higher zones and it relatively underperformed the benchmark index.
Resistance is gradually shifting lower and now till it holds below 28,000 levels weakness could be seen towards next support of 27,500 then 27,250 levels while on the upside hurdle is seen at 28,250 then 28,500 levels.
Stock wise positive setup is seen in very selective stocks as advance: decline ratio and market breadth also was negative. Stock wise positive setup is seen in Reliance Industries, HDFC and TCS while negative set up is seen in most of the PSUs, NBFC, pharma, midcap banks and high beta stocks.
(The author is Associate Vice President | Analyst-Derivatives at Motilal Oswal Financial Services Limited.)
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