Home Market F&O: Nifty options signal trading range between 10,800 and 11,171

F&O: Nifty options signal trading range between 10,800 and 11,171


By Chandan Taparia

The Nifty50 index opened positive but failed to hold above the 11,000 mark and continued its weakness towards the 10,850 level, which is the 50% retracement of the entire upswing from 9,952 to 11,760 levels.

The index has been making lower tops and lower bottoms for last four weeks and has corrected about 900 points from its lifetime high of 11,760. As long as it remains below the 11,050-11,080 zone, the overall weakness could continue and take the index towards 10,850 and then 10,750-10,700 zone, while on the upside medium-term hurdles are seen at 11,080 and then 11,171 levels.

Options data is scattered at all strike prices at the beginning of the October Series. On the options front, maximum Put open interest was at 11,000 followed by 10,800 while maximum Call OI was at 11,500 followed by 11,200. There was Put writing at 11,000 followed by 10,800 while Call writing was seen at 11,300 and then 11,200. The Option band signified a wider trading range between 10,800 and 11,171 levels.

India VIX moved up 0.44 per cent to 17. It has risen 9.36 per cent this week and 35 per cent this month. Rising volatility suggests the bears are holding a tight grip on the market.

Bank Nifty remained highly volatile throughout the session and traded in a range between 24,900 and 25,355 levels. Nifty formed a Doji candle on the daily scale and formed a bearish candle on the weekly scale, forming a lower top and bottom.

As long as it holds below the 25,500-25,650 zone, Nifty could extend its losses towards the 24,650-24,500 zone.

Nifty futures closed in the negative at 10,964 with a loss of 0.59 per cent. Long buildup was seen in Axis Bank, Britannia, HDFC Bank and Wipro while shorts were seen in JustDial, IGL, Jubilant Foodworks, Hero MotoCorp, KPIT, Indiabulls Housing Finance and SAIL.

Original Article


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