F&O: Selling pressure haunting Nifty on every rise; setup weak

By Chandan Taparia

The Nifty50 index on Wednesday failed to surpass Tuesday’s high as follow-up was missing at higher levels and the index witnessed selling pressure in the last hour of trade. The index failed to hold its gains and selling pressure was visible on every small bounce. Nifty formed a Bearish Candle on the daily scale and till it holds below 11,250, it can extend its weakness towards 11,118 and then 11,000 levels, while on the upside hurdle is seen at 11,250 and 11,333 levels.

On the options front, maximum Put open interest was at 11,000 followed by 11,500 while maximum Call OI was at 12,000 followed by 12,500. There was Call writing at 11,300 followed by 11,500 levels, while Put writing was seen at 11,000. The option band signified a shift in lower trading range between 11,000 and 11,500 levels.

India VIX moved up 5.63 per cent to 28.65 level. However, a higher VIX suggested that volatile swings could continue in the market ahead of election outcome.

Bank Nifty failed to cross 28,950 level and slipped towards 28,600 in the latter part of the session. It formed a Bearish Candle on the daily scale as selling pressure emerged at higher levels. Now if it holds below 28,888, then weakness could be seen towards 28,388 and then 28,250 levels, while on the upside, a hurdle is seen at 29,000.

Nifty futures closed negative at 11,164 with a loss of 0.68 per cent. Long buildup was seen in SRF, Jubilant Foodworks, IndiGo and Pidilite Industries while shorts were seen in Union Bank, Yes Bank, Zee and Jet Airways.

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