Price set up suggests a consolidative move but trend could remain intact with buying on declines after the strong momentum and bottom put process of last couple of weeks
Nifty index formed an Inside Bar candle on the daily scale and a High Wave candle on weekly scale with a long upper and lower shadow. Candle formation indicates that buying interest is seen at lower levels while resistances are intact at higher zones.
Price set up suggests a consolidative move but trend could remain intact with buying on declines after the strong momentum and bottom put process of last couple of weeks. It has been consolidating in between 11,400 to 11,600 levels from the last three sessions and respecting to its gap up zones.
Now it has to continue to hold above 11,500 levels to witness an upmove towards 11,666 then 11,700-11,750 levels, while on the downside, supports are seen at 11,450 and 11,380 levels.
The India VIX moved up by 4.64 percent from 15.40 to 16.11 level.
On the options front, maximum Put open interest is at 11,000 followed by 11,500 strike while maximum Call open interest is at 11,500 followed by 11,200 strike. We have seen minor Put writing at 11,500 followed by 11,600 strike while Call writing was seen at 11,700 followed by 12,000 strike.
Option data suggests an immediate trading range for Nifty in between 11,300 to 11,700 levels.
Bank Nifty consolidated for most part of the day as it traded in the range between 29,700 to 30,100 levels. It formed a Small Bodied Candle on daily scale while a High Wave candle on the weekly scale. It is finding multiple supports near 29,500 while hurdles are intact at higher zones.
Now it has to continue to hold above 30,000 to extend its gains towards 30,500 then 30,750 levels while on the downside support is seen at 29,400 then 29,250 levels.
Stock wise positive setup is seen in Kotak Mahindra Bank, ICICI Bank, Reliance Industries, Pidilite Industries, Bata India, Bajaj Finance, Muthoot Finance, ICICI Prudential Life, Voltas, Siemens while weakness is seen in Indiabulls Housing Finance, Yes Bank, Zee Entertainment, Strides Pharma Science and RBL Bank.
We expect FMCG, consumption and selective private banks to lead the market while PSU, ,etals and many beaten down counters could down their downwards journey.
(The author is Associate Vice President | Analyst-Derivatives at Motilal Oswal Financial Services Limited.)
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