F&O: Nifty50 negates higher lows; bulls & bears continue tug of war

By Chandan Taparia

Nifty opened flat, but witnessed huge intraday swings as it failed to surpass the immediate hurdle at 11,750 level. During the day, the index fell near the 50-DEMA at 11,535 level, but witnessed a gradual recovery from lower levels in the second part of the session.

November F&O series started on a volatile note, and the index remained highly volatile in a 200-point range. It settled the day in the negative with a loss of around 30 points, and saw a lowest daily close in 19 sessions. It formed a High Wave Candle with long upper and lower shadows, indicating a tug of war between the bulls and the bears.

The index ended the week 2.37 per cent lower and, in the process, negated the formation of higher lows of last four weeks. Now it has to cross and hold above the 11,750-11,777 zone to get the bull’s grip for a bounce towards 11,900 and then 12,020 levels, while on the downside, major support exists in the 11,550-11,500 zone.

India VIX moved up 3.05 per cent from 24.02 to 24.75 level. Volatility is moving up since the last four consecutive weeks and needs to cool down for the market to stabilise ahead of the US election.

Options data lay scattered at various strike prices. Maximum Put open interest stood at 11,000 level followed by 11,500, while maximum Call OI was at 12,000 followed by 12,500 levels. Marginal Call writing was seen at strike prices 11,600 and 12,000 while there was Put writing at 11,200 and 11,300 levels. Options data suggested a wider trading range between 11,200 and 12,000 levels.

Bank Nifty opened flat but failed to surpass the immediate hurdle at 24,250 level and drifted towards the 23,600 mark. It remained volatile through the day, but witnessed some recovery from the lows to settle the session with a loss of around 200 points. The index formed a bearish candle with long upper and lower shadows on the daily scale, which indicated a state of confusion with limited upside in the rate-sensitive index. Now, it has to cross the 24,250 level; to witness a bounce towards the 24,750 mark, while the immediate key support was seen at 23,750 and then 23,500 levels.

Nifty futures closed negative at 11,639 level with a loss of 0.24 per cent. The trade setup looked positive in Chola Finance, TVS Motor, HPCL, Adani Ports, Ambuja Cement, Tata Steel, RIL, Cadila and Apollo Hospital but weak in Bharti Airtel, Hero MotoCorp, HUL, Lupin and L&T.

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