F&O: Nifty50 must hold 11,250 to move towards 11,400-11,450 zone

By Chandan Taparia

NSE Nifty managed to hold the 11,100 level in the initial hour of the session on Wednesday and witnessed sustained buying in the second half to extend gains towards 11,320. The index gained nearly 200 points to form a big bullish candle on the daily scale and negated the formation of lower top and lower bottom on the lower time frame.

Nifty has respected its 61.8 per cent retracement of the entire upmove from 10,762 to 11,695. Now the index has to hold above 11,250 to extend its move towards 11,400-11,450, while on the downside, major support is seen at 11,100.

On the options front, maximum Put open interest (OI) was at 11,000 followed by 11,200 strike, while maximum Call OI stood at 11,200 followed by 11,500 strike. Put writing was seen at 10,600 followed by 11,200 strike, while Call writing was seen at 11,200 and then 11,300 strike.

Option data suggests a wider trading range between 11,000 and 11,600 levels.

India VIX moved down by 3.79 per cent to 17.15.

Nifty Bank opened positive and witnessed sustained buying interest throughout the session. It retested previous breakout zone and bounced back sharply by gaining more than 1,000 points. The index also negated its lower highs formation after seven trading sessions and formed a pattern similar to Morning Star candlestick on the daily scale, which implies that bulls are ready to move higher. Now, till the index holds above 28,250, it could extend gains towards 29,000 and then 29,250, while on the downside, supports are seen at 28,500 and then 28,250.

Nifty futures fell 1.79 per cent to 11,362. Builtup of long positions were seen in Just Dial, Berger Paints, Siemens and ACC, while shorts were seen in Nalco, ICICI Prudential Life Insurance, RBL Bank and Jubilant FoodWorks.

(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)