Thursday, March 4

F&O: Nifty charts show a tug of war between bulls & bears

Nifty opened with a gap up and took support near the 14,650 level on Tuesday. It respected the previous day’s low, but failed to hold above the immediate hurdle at 14,850 and drifted lower. The index finally closed the session with a gain of around 40 points after the profit booking decline of the last five sessions.

The index formed a bearish candle on the daily scale with longer wicks, which indicated a tug of war between the bulls and the bears in the market. Nifty negated the formation of lower lows of the last four sessions, but continued to form lower highs. Now, as long as it remains below 14,850 level, weakness can continue and take Nifty towards the next key support at 14,600 and 14,500 levels, while on the upside, hurdles are seen at 15,000 and 15,150 levels.

India VIX fell 0.95% from 25.47 to 25.22. Overall, a higher VIX is keeping the market in roller-coaster mode and limiting the upside.

On the options front, maximum Put Open Interest stood at 14,000 level followed by 14,500 while maximum Call OI was seen at 15,000 followed by 14,800 levels. There was Put writing at strike prices 14,700 and 14,600 while Call writing was seen at 14,800 and 14,700 levels followed by unwinding at 15,500. Options data suggested a wider trading range between 14,300 and 15,200 levels, while the immediate range is seen between 14,500 and 15,000 levels.

Bank Nifty opened with a gap up, but failed to sustain the opening hurdle at 35,700 level. Banking stocks witnessed selling pressure, and as a result the index breached the 35,000 level and closed the day with a loss of around 140 points. It formed a bearish candle on the daily scale and continued to form lower highs and lows for the fifth session in a row. Now as long as the index remains below 35,700 level, weakness may continue and take it towards 34,500 and 34,250 levels, while on the upside the major hurdle has shifted to the 36,000 level.

Nifty futures closed positive at 14,724 level with 0.35% gain. On the stocks front, the trade setup looked bullish in

, Tata Motors, SAIL, , Cummins India, Nalco, UPL, , Siemens, BPCL, Tata Chemicals, Jubilant Foodworks, NMDC, Vedanta, and JSW Steel but weak in Bank of Baroda, Kotak Bank, IGL, Godrej Consumers, MGL, Maruti, Cadila, and Glenmark.

(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)




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