By Chandan Taparia
The Nifty index opened flat to positive and remained slightly dull in the initial half of the session on Wednesday. It failed to hold 17350 and drifted towards 17250 zones but picked up throughout the next half to close on flattish note. It breached its prior day’s low but obtaining interest at declines made it to close above 17350 levels. It formed a Hammer sort of candle on day-to-day scale with extended decrease shadow indicating obtaining interest is intact at any declines. Now it has to continue to hold above 17300 zones to extend the move towards 17500 and 17777 zones when on the downside help is seen at 17200 and 17050 levels.
India VIX fell down by 3.29% from 14.89 to 14.41 levels. India VIX desires to hold under 13 zones to continue the bullish momentum. On the Option front, Maximum Put OI is at 17000 followed by 16500 strike when maximum Call OI is at 17500 followed by 17400 strike. Call writing is seen at 17300 then 17400 strike when Put writing is seen at 17000 then 16900 strike. Options information suggests a broader trading variety in in between 17000 to 17800 zones when an instant trading variety in in between 17200 to 17500 zones.
Nifty took a breather and Bank Nifty is approaching greater levels and creating strength as bullish bias is intact. Overall structure appears positive for the coming handful of sessions and traders are advised to get on any declines.
Bank Nifty
Bank Nifty opened positive and momentum in the banking stocks pulled the index towards 36850 levels. It outperformed the broader industry today and closed close to its day’s higher with gains of about 300 points. It formed a Bullish candle on day-to-day scale and recovered it losses of the prior session. Now it has to hold above 36750 to witness an up move towards 37000 and 37250 levels when on the downside help are seen at 36500 then 36250 levels.
For weekly Bank Nifty, Maximum Put OI is at 36500 strike and maximum Call OI is placed at 37000 strike. We have seen important Call in 36500 when Put writing is witnessed at 36700 with minor unwinding at 35500 strike.
Stocks to watch out for
On the sectoral front, the Banking and economic services space drove the industry whereas profit booking decline was seen in IT and Media stocks. We have a positive view in the Bank Nifty index for a move towards 37250 zones. Stock particular Kotak Bank, HDFC AMC, NAM INDIA, IEX, Trent and ICICI Prudential appears powerful for 4-8% move more than the next coming sessions.
(Chandan Taparia is the Vice President – Equity Derivatives & Technical, Broking & Distribution at Motilal Oswal Financial Services Ltd. Views expressed are the author’s personal. Please seek the advice of your economic advisor prior to investing.)