F&O Manual | Nifty, Sensex rangebound, both indices trading near 50 DMA support

At 12:32 hrs IST, the Sensex was up 27.92 points or 0.04 percent at 73,539.77, and the Nifty was up 20.50 points or 0.09 percent at 22,323.00. About 1980 shares advanced, 1183 shares declined, and 98 shares unchanged.

Indian benchmark indices were trading range bound amid volatility on May 8. In the afternoon trade, the Nifty had turned mildly green, up 41 points to 22,344, recovering from the day’s losses. Options data suggests heavy call writing at 22,500 forming strong resistance for the day.

Analysts assess the near term support levels for the Nifty at 22,300 and 22,180-22,170. They see resistance for the index at 22,410-22,430 levels on the upside.

Bars in red indicate the change in open interest (OI) of call writers, while the green bars show the change in OI of put writers

Options data suggests heavy call writing at 22,500 levels forming strong resistance for the day. “Meaningful call writing is witnessed across 22,400-22,500 strikes,” said Sudeep Shah, DVP and Head of technical and derivative research at SBI Securities

SBI Securities: Put writing on Nifty options is seen in 22,200-22,100 strikes. The overall range for the coming few sessions could be 22,430 on the upside, and 22,180 on the downside, said Sudeep Shah.

“Any sustainable move above 22,430 will lead to an extension of the rally towards 22,600-22,650 in the short term. If the index slips below 22,170, it will lead to further selling pressure in the index down to the 21,950-22,050 level,” he added.

Prabhudas Lilladher: “The Nifty index now has major support near the significant 50 DMA level of 22,300 for the coming days. With a decisive close below 22,300, the Nifty can slide further till 22,100-22,000.”

Sensex technical view

Prabhudas Lilladher: Sensex has closed below 20 DMA and is trading around 50 DMA level of 73,500. The BSE index has next important and crucial support at 73,000. Resistance is seen at 74,000.

Among individual stocks, long build up is observed in MFSL, Marico and ABB. While short build up is seen in Voltas, PEL and TVS Motor.

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