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Nifty needs to hold 18150 for up-move, Bank Nifty support at 40500; watch these stocks for action

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By Shivangi Sarda

Nifty index opened positive on Wednesday and while it remained range bound for most part of the day, the concluding hour witnessed selling pressure. It respected its previous day’ low levels but bulls are feeble and lack of follow up buying is limiting the upside. It formed a Bearish candle on daily scale but is forming higher lows from the last two sessions.

India VIX was up by 0.46% from 16.75 to 16.82 levels. Rise in volatility from lower zones is giving some discomfort to the bulls and suggests volatile cues. Now VIX needs to cool down below 15-14 zones to continue the smooth market ride. On Option front, Maximum Put OI is at 18000 followed by 18200 strike while maximum Call OI is at 18500 followed by 18300 strike. Call writing is seen at 18300 and 18350 strike while minor Put writing is seen at 17950 then 18050 strike. Option data suggests a trading range in between 18000 to 18400 zones.

Nifty and Bank Nifty is facing some pressure and move in a consolidative way. Traders are advised to buy on dips till the index holds key support levels.

Bank Nifty opened flattish and moved in a weak way throughout the day and drifted by more than 400 points in the last hour. It breached its previous day’s low levels and closed with losses of more than 360 points. It formed a Bearish candle on daily frame and negated its higher lows formation of the last five sessions.

For weekly Bank Nifty, Maximum Put OI is at 40000 strike and maximum Call OI is placed at 42000 strike. We have seen significant Call writing in 41200 while minor Put writing is witnessed at 40800 and unwinding at 41000 strike. Now it has to cross and hold above 40800 zones to witness an up move towards 41300 and 41500 levels while on the downside support can be seen at 40500 and 40250 levels.

On sectorial front, Media, Metal, Private Banks, Financial Services and Auto sector faced profit booking decline and showed weakness whereas PSU Banks, IT, Pharma, FMCG and Realty counters outperformed the market. 

We have positive stance in PSU Bank (State Bank of India, Can Bank, Bank of Baroda), IT Stocks (Mindtree, Tech Mahindra, Infosys), Consumption (Mcdowell, UBL), FMCG (Pidilite Industries, Asian Paint), Private Bank (ICICI Bank). Now Nifty has to hold above 18150 zones to witness an up move towards 18350 and 18450 zones while on the downside support exists at 18100 and 18000 marks.

(Shivangi Sarda is a Quantitative Analyst, Derivatives and Technical Research at Motilal Oswal Financial Services. Views expressed are the author’s own. Please consult your financial advisor before investing.)

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