Markets

F&O: Nifty needs hold above 10,178 to extend rise towards 10,400 levels

By Chandan Taparia

Nifty index continued up move and rallied by around 100 points. Recently it negated its formation of lower highs lower lows and has been forming Bullish Candle on the Daily chart.

The index managed to surpass its 50-DEMA and covered half of the losses made in previous week. Now it has to continue to hold above 10,178 to extend its move towards 10,330-10,400 zones, while on the downside support exists at 10,150 then 10,094 mark.

On the option front, maximum Put open interest is at 10,000 followed by 9,800 strike while maximum Call OI is at 10,500 followed by 10,400 strike. We have seen Call unwinding in most of the strikes while fresh Put writing is seen at 10,200 strike. Fresh Put writing at 10,200 could act as an immediate support to hold the recent bounce back move.

India VIX fell down by 4.19 per cent at 13.67. Decline in VIX by 10 per cent in last two sessions has given relief to bulls, and market recovered smartly from lower zones.

Bank Nifty managed to continue its upmove and formed a Bullish Belt Hold candle on the daily scale. Now it has to continue to hold above 25,100 zones to witness an up move towards 25,500 then 25,750 while on the downside major support exists at 25,000 zones.

Nifty Future closed with gains of 0.85 per cent at 10,290. Built up of long position were seen in Pidilite Industries, Ajanta Pharma, Sun TV, Havells, Maruti, Justdial, Voltas, Divis Labs, Bharti Airtel, Colpal, Shriram Transport Finance Company, BPCL, HUL and Ambuja Cements while shorts were seen in Union Bank, Hero MotoCorp, Cummins, ZEEL, Infratel, Petronet and SBI.

(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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