On the options front, maximum Put OI is placed at 10,800, followed by 10,600 strikes, while maximum Call OI is placed at 11,200, followed by 11,700 strikes.
Indian markets witnessed a technical bounce back on September 4 to reclaim 10,800 levels and formed a bullish candle on the daily chart after a massive fall was seen in the previous session.
The index is still trading below crucial short-term moving averages and despite the bounce, the trend is still negative, suggest experts. Traders are advised to trade with strict stop losses as long as the index trades above 10,756-10,637 levels.
The Nifty, which opened at 10,790, witnessed some selling pressure that pushed the index towards 10,746. The index recovered in the second half of the trading session to hit an intraday high of 10,858 before closing at 10,844, up 46 points.
“The Nifty50 registered a small bullish candle after retracing almost 80% of its last leg of the rally from the lows 10,637–11,141 levels. Interestingly, the said index recoiled after testing the lows of 10,750 registered on August 26 from where a strong bounce was witnessed,” Mazhar Mohammad, Chief Strategist, Technical Research & Trading Advisory, Chartviewindia.in, told Moneycontrol.
“Hence, as long as the Nifty sustains above 11,756 levels, bulls can remain slightly optimistic. In case bulls eventually manage a close above 11,042 levels, traders can remain confident that recent bottom of 10,637 can hold for some more time,” he said.
Mohammad also added that if the Nifty would continue to trade below 10,750 on closing basis then a breach of 10,637 looked inevitable, with ultimate targets placed around 10,550. “However, positional shorting opportunity can arise on a close below 10,750, with initial targets of 10,550 kinds of levels,” he added.
The India VIX fell by 4.54 percent at 17.23 levels. On the options front, maximum put OI is placed at 10,800, followed by 10,600 strikes, while maximum call OI is placed at 11,200, followed by 11,700 strikes.
Call writing was seen at 11,000, followed by 10,900 strikes, while minor put writing was seen at 10,800 and 10,600 strikes. Options data suggests a lower trading range in between 10,600 and 11,200 zones.
The Bank Nifty managed to hold 26,600 zones and gradually extended its gains toward 27,300 levels. It formed a bullish candle on the daily scale, as buying was seen at lower levels and relatively outperformed the benchmark index.
“The Bank Nifty needs to hold above 27,250 zones to witness a bounce towards 27,500 then 27,750, while on the downside supports are seen at 26,850 then 26,600 levels,” Chandan Taparia, Associate Vice President, Analyst-Derivatives, at Motilal Oswal Financial Services told Moneycontrol.
“The Nifty formed a bullish candle on the daily scale as buying interest was seen at lower levels while hurdles are intact at higher zones, and now the index needs to hold above 10,800 zones to witness a bounce towards 10,950 then 11,000 zones, while on the downside supports are seen at 10,750 then 10,700 levels,” he said.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.