By Chandan Taparia
The Nifty closed in the negative zone after four trading sessions on Friday. The index negated the formation of higher highs, higher lows of t he last four sessions and formed a small bodied indecisive candle on the daily charts, however on weekly scale, it still holds overall bullish setup.
The index failed to surpass the 11,600 level and witnessed a profit booking as it declined towards the 11,532 mark.
The overall trend remains intact from positive to rangebound, as the Nifty has been trading in a rising channel with the support of rising trend line. Now, it has to continue to hold above the 11,550 zones to witness an upmove towards 11,635 and then 11,666, while on the downside immediate major support is seen at 11,500-11,450 zone.
On the option front, maximum Put OI moved back to 11,000 level, followed by 11,500 strike, while maximum Call OI was at 11,600 and then 11,500 strike. We have seen Put unwinding at most of the immediate strike prices, while Call writing was seen at 11,600, 11,650 and 11,750 strikes.
The volatility index India VIX fell down 2.76 per cent to 12.40, and overall lower volatility suggests that the bulls may support the market on declines.
Bank Nifty remained under pressure for a third straight session and has been underperforming the headline Nifty. It recently failed to surpass its multiple hurdle at 28,333 zone and fell towards the 27,782 mark. The index formed a Dark Cloud cover on weekly and an early formation of Double top on daily scale, which suggest that some more profit booking could be seen if it doesnt surpass immediate hurdle of 28,000 zone. Now, if it sustains below 28,128 level, then more profit booking could be seen towards 27,650 and then 27,440 levels.
Nifty futures closed in the red with a loss of 0.19 per cent at 11,572. Builtup of long positions were seen in Apollo Hospitals, BHEL, Kajaria Ceramics, PNB and Voltas, while shorts were seen in Colgate Palmolive, Yes Bank, Mindtree, Jet Airways and Sun TV.
(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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