Home Market F&O: Nifty charts show bear grip on market, consolidation ahead

F&O: Nifty charts show bear grip on market, consolidation ahead


By Chandan Taparia

The Nifty50 index opened flat and remained under pressure throughout the trading session on Friday. It formed a Three Black Crows pattern on the daily scale, which implies the bears are taking a grip on the market at higher levels, but the index is respecting its support zone.

Nifty50 has been making lower highs and lower lows for last two sessions and till it holds below 10,638, weakness could be seen till 10,550 and 10,500 levels, while if it sustains above 10,680, then the upside could be seen till 10,780-10,800 zone.

The index has been making higher highs and higher lows on the weekly scale, but closed negative after the five positive weeks, which indicates a pause in the positive momentum. Nifty needs to consolidate first to start the next upward move.

On the options front, maximum Put open interest stood at 10,500 followed by 10,400 while maximum Call OI was at 11,000 followed by 10,800. There was Put writing at 10,400 and 10,500 levels while Call writing was seen at 10,700 and 10,800 levels. Options data suggested an immediate trading range between 10,550 and 10,750 levels.

India VIX moved up 2.08 per cent to 13.12. There was a spike in volatility after the decline of last four weeks and it requires a hold below 13.50 to bring positivity back to the market.

Bank Nifty outperformed Nifty for the week as it closed positive with around 1 per cent gain against Niftys 0.69 per cent loss. It has seen the highest daily close and has been holding its winning streak from last six sessions. Now it has to continue to hold above 25,500 to extend its move towards 25,750 and then 26,000 levels, while on the downside, supports are seen at 25,250 and then 25,100 levels.

Nifty futures closed in the negative at 10,660 with a loss of 0.43 per cent. Long buildup was seen in Marico, ICICI Bank, TechM, Petronet LNG, Torrent Pharma, L&T Finance and Jubilant Foodworks while shorts were seen in Hexaware, NIIT Tech, Siemens, Ambuja Cement, TVS Motor, Castrol India, Granules, Ajanta Pharma, Vedanta, Bharat Forge and CEAT.

(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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