Price pattern suggests that some recovery could be seen from lower levels but upside could be restricted again in the absence of follow up buying interest
Nifty index opened negative and drifted towards 10,650 zones in the initial hour of the session but recovered sharply from lower zones to extend it gains towards 10,860 levels.
It remained highly volatile throughout the session and traded in wider range of 225 points.
It formed a Piercing Pattern on daily scale while Bearish Candle on weekly scale.
It closed positive after the decline of last three sessions but has been forming lower highs - lower lows so needs to negate the same to get the stability.
Price pattern suggests that some recovery could be seen from lower levels but upside could be restricted again in the absence of follow up buying interest.
Now, it has to hold above 10,750–10,780 zones to witness a bounce towards 10,929 then 11,000-11,050 zones while a hold below 10,720 could drag it towards its recent swing low of 10,637 and even lower marks.
India VIX moved up by 4.20 percent from 16.65 to 17.35 levels. On the Options front, Maximum Put OI is at 10,700 followed by 10,500 strike while maximum Call OI is at 11,000 followed by 11,100 strike.
We have seen Put writing at 10,600 followed by 10,700 strike while Call writing is seen at 10,700 followed by 10,800 strike. Option data suggests a shift in lower trading range between 10,700 to 11,000 zones.
Bank Nifty opened gap down but recovered sharply from lower zones to close near 27,000 levels.
It formed a small bodied candle on daily scale while Bearish candle on weekly scale which suggests that supply is visible at higher levels. It relatively underperformed the Benchmark index and now needs to hold above 27,000 zones to extend its bounce towards 27,500 then 27,700 zones while on the downside support exists at 26,500 then 26,200 zones.
Stock specific positive setup in Bata, Asian Paint, Berger Paint, Hindunilvr, Indigo, Reliance, TCS, Infy, Tata Global while weakness in ITC, Indusind Bank, etc.
(The author is Derivatives & Technical Analyst at Motilal Oswal.)Disclaimer: 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.The Great Diwali Discount!
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