Fresh Call writing is being witnessed at 10,800, followed by 10,700 strikes, which indicates limited upside
Motilal Oswal Financial Services
The Nifty remained rangebound between 10,480 and 10,620 for most part of last week. It formed a small bodied and narrow range candles on a daily and weekly scale, which indicates that the decline is being bought into, but follow-up buying is missing at higher zones to extend the bounceback.Now, the index has to continue to hold above 10,450-10,480 levels to extend its move towards 10,650-10,750. On the downside, multiple supports exist at 10,450 and then 10,380 levels.
The index remained positive to rangebound with lesser open interest and trading volume activities in a truncated week. It remained at the upper part of the previous week’s strong bullish candle after the recent trend reversal.
India VIX fell 2.58 percent to 17.76 last week. Volatility has been falling for the last three consecutive weeks, which is supporting buying interest on declines. Now, VIX has to hold below 17-16 levels to extend the upside momentum further.
On the option front, maximum Put OI is seen at 10,000, followed by 10,200 strikes. Maximum Call OI is seen at 11,000, followed by 10,800 strikes. Fresh Call writing is being witnessed at 10,800, followed by 10,700 strikes, which indicates limited upside. Put writing is seen at 10,500 strike. Option band signifies an immediate trading range between 10,500 and 10,700 levels.
The Bank Nifty has been consolidating between 25,500 and 25,850 levels for the last five trading sessions. It formed an indecisive candle on the daily as well as weekly scale, which implies that the bulls are not loosening their grip, whereas bears are putting pressure at higher levels.
The banking index is hovering near its 50 and 200 daily exponential moving average for the last one week. It now needs to hold above the 25,850 zone to form a small Pole and Flag pattern breakout to move towards 26,250 levels. A hold below 25,500 could change the immediate price set-up.
The author is Associate Vice President | Analyst-Derivatives at Motilal Oswal Financial Services LimitedDisclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.