F&O: Nifty has to hold above 9,560 for any fresh spike towards 9,650
By Chandan Taparia
The Nifty50 index opened in the negative, but managed to hold above the 9,450 level and recovered around 85 points from the day’s low. In the process, the index formed a Bullish Hammer candle on the daily chart, but it needs to surpass the 9,560-9,580 zone to again get into the comfort zone and extend its recent bounceback.
On the downside, if it slips below 9,480, it may again attract selling pressure towards 9,450 and 9,420 levels, but if it holds above the 9,560-9,580 zone, it could lead to a fresh spike towards the 9,650 level.
On a weekly basis, the index continued its decline for the third consecutive week and formed a small bearish candle on the monthly chart, similar to a Spinning Top. It saw a negative close on a monthly basis after five successive months of gain from January through May.
On the options front, maximum Put open interest stood at strike prices 9,400 and 9,500, while maximum Call open interest was seen at strike prices 9,700 and 9,500.
Call and Put writing was seen at most strike prices as OI concentration remained scattered at different strikes at the beginning of the new series. As of now, options data showed huge significance of the 9,400-9,700 band on a weekly basis.
The India VIX moved up 3.10 per cent after a decline in the previous two sessions.
The Bank Nifty formed a hammer candle on the daily chart, as it managed to hold above it support of 23,000 and bounced back to the 23,250 mark. In the beginning of the May series, it saw a breakout from the 22,978 level and this level will now be critical to market sentiment. If the Bank Nifty manages to cross and hold above 23,333, then it can bounce to 23,500 and 23,700 levels, while below the 23,000 mark, it may fall to the 22,750 level.
Long buildup was seen on the FMCG, pharma and select metals counters while shorts were created in airlines, realty and select cement stocks.
(Chandan Taparia is Technical & Derivative Analyst at Motilal Oswal Securities. Investors are advised to consult financial advisers before taking an investment calls based on these observations)
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Via:: Economic Times – Stocks