F&O: Nifty50 in the grip of Put writers; sets up bullish pattern




India VIX fell 4.87% to 11.75 and a decline in VIX below 12.50 has raised hope for a new rally in the market. NSEBSEWiproLoading data…

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                                ChartsValuation & Peer ComparisonCommunity BuzzPEER COMPANIESNCCMindTreeKotak BankJubilant FoodWorksIGLHavellsGrasimExide IndustriesCeatBharat ForgeBajaj FinanceACCEXPAND TO VIEW ALL By Chandan Taparia

                                The Nifty50 index continued its upward move in line with the range breakout on Monday, and headed towards the 10,100 level. It formed a Bullish Candle on the daily chart and is just a few points away from its lifetime high of 10,138.

                                The index has been making higher highs and higher lows since last two sessions and has gained momentum seen its broke out of the range between 9,850 and 9,980 levels. Now, the index has to continue to hold above 10,050 to extend its move towards 10,138 and then 10,200 levels, while on the downside, supports are seen at 9,980 and then 9,928 levels.

                                On the options front, maximum Put open interest was seen at strike price 9,900 followed by 9,700 and 9,800, while maximum Call OI shifted from strike price 10,000 to 10,200.
                                Significant Put writing was seen at strike prices 10,100 and 10,000, which indicated that Put writers were keeping the grip on the market, while the shift in maximum Call OI is creating scope for the index to head towards 10,200 levels.

                                Options data suggests a shift of the support to the psychologically important 10,000 level, while on the upside it is all set to hit the new lifetime high.

                                The India VIX fell 4.87 per cent to 11.75 and a decline in VIX below 12.50 has raised hope for a new rally in the market.

                                Bank Nifty headed towards the 24,800 mark and closed with a gain of around 0.50 per cent. Now, if it holds above 24,650, the index can extend its move towards 25,000 and then 25,200 levels, while on the downside, supports are seen at 24,500 and then 24,350 levels.

                                Bank Nifty’s weekly contract has seen major Put writing at strike prices 24,700 and 24,500 while maximum Call open interest remained intact at strike price 25,000, which restricted the upside movement. However, major Call writing was seen at strike price 24,100.

                                Nifty futures closed with a gain of 0.79 per cent at 10,105. Long buildup was seen on the counters of Voltas, Havells, IGL, Asian Paint, ACC, BEL, NCC, SRF, Exide Industries, Grasim, CEAT, Divi’s Labs, Kotak Bank, ZEEL, Tata Steel and Bharat Forge, while shorts were seen only in Indiabulls Housing, Jubilant Foodworks, Bajaj Finance, Wipro and MindTree.

                                (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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