Home Market F&O: Nifty50 below 10,050 could start a fresh leg of decline

F&O: Nifty50 below 10,050 could start a fresh leg of decline


By Chandan Taparia

Nifty50 index opened positive, but failed to surpass the previous day’s high of 10,227 and slipped towards 10,100 zones.

The index formed a bearish candle on the daily chart and witnessed selling pressure in the last one hour of the trade. It is hovering near to its 200-DEMA, but follow-up buying is missing even after its recent swing support at 10,050 zones.

Now, Nifty50 has to cross and hold above 10,141 zones to witness a bounce towards 10,222, and then 10276, while a decline below 10,050 could start fresh leg of decline towards psychological support of 10,000-9,980 zones.

On the option front, maximum Put open interest is at 10,000, followed by 10,100 strikes, while maximum Call open interest is at 10,500, followed by 10,400 and 10,200 strike. We have seen Put writing at 10,100 strikes, while Call writing is also seen at 10,200, followed by 10,100 strikes. Option band signifies a trading range between 10,000 and 10,300 zones.

India VIX moved up by 0.93 per cent to 15.24.

Bank Nifty failed to hold its bounce and slipped towards 24,100 zones. It formed a bearish candle on the daily chart. Now, if it fails to surpass 24,350 zones and slip below 24,000 zones, then weakness could extend towards 23,800 levels, while on the upside, hurdles are seen at 24,350 then 24,500.

Nifty futures closed with a loss of 0.63 per cent at 10,116. Built up of long position were seen in Jubilant FoodWorks, Hexaware, Titan, GAIL and NTPC while shorts are seen in Mindtree, Bajaj Finance, SBI, Ceat, YES Bank, Wipro, Adani Ports and Jet Airways.

(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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