Markets

F&O: Nifty OI levels signal broader trading range at start of Jan series

By Chandan Taparia

The Nifty50 index opened positive but failed to surpass the 10,835 level and remained consolidative near the 10,800 level for most part of the session. It closed positive with a gain of around 50 points but formed a bearish candle as it closed lower than its opening high.

The index recently hit a high near the 10,985 mark and a low near the 10,534 level, and now it is hovering near to the middle of that zone. As of now, the price setup suggests a broader trading range with limited upside and needs to hold above the 10,750-10,777 zone to extend it towards 10,850 and then 10,929 levels, while on the downside support exists at 10,700 level.

On the options front, open interest was scattered at different strike prices, as a new futures and options series is about to begin for the new calendar year. Maximum Call OI was at 11,000 followed by 11,200 levels while maximum Put OI was at 10,500 followed by 10,000 level.

The option band signified a broader trading range between 10,500 and 11,000 levels. India VIX remained flat to positive with a gain of 0.96 per cent at 16.07 level. The VIX needs to cool off below 16 to see further move, else we could again get stuck in that range.

Bank Nifty failed to cross its immediate hurdle at 27,250 and slipped towards the 26,850 level. It formed a bearish candle on the daily scale, but as long as it holds above the 26,666-26,850 zone, it can extend its move towards 27,200 and then 27,350 levels, while on the downside, major support exists at 26,666 and then 26,400 level.

Nifty futures closed positive at 10,780 with a gain of 0.30 per cent. Long buildup was seen in IT, energy and FMCG stocks while shorts were seen on metals and auto counters.

Nifty closed negative at 10,779 with a loss of 0.73 per cent on expiry-to-expiry basis as November series had closed at 10,858. Bank Nifty closed flat to negative at 26,878 on an expiry-to-expiry basis with a loss of 0.23 per cent, as the November series had closed at 26,939 level. Roll cost fell, which indicated that shorts are still rolling to the next series, as less aggression was seen on the long side in the market. Nifty futures have seen rollover of around 71 per cent while Bank Nifty has seen around 74 per cent rollover as per the provisional data, which is in line with that in the last series.

(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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