Nifty opened positive on Tuesday in line with strong global cues and witnessed buying momentum throughout the session to extend its gains towards 11,840 level. It formed a bullish candle on the daily scale and negated the formation of lower highs and lows in the smaller time frame chart. The index managed to hold above its crucial zone at 11,777 and closed above its 20-DEMA. Now, it has to hold above the 11,750- 11,777 zone to witness a bounce towards 11,900 level and then 12,020, while on the downside support is seen at 11,666 and then 11,550 level.
India VIX fell 3.85 per cent from 25.21 to 24.24 levels. However, volatility is rising since the last four weeks and needs to cool down for the market to stabilise ahead of the US election outcome.
Since it is the beginning of a new derivative series, Options data lay scattered at various strike prices. Maximum Put open interest was seen at 11,000 followed by 11,500 levels, while maximum Call OI was seen at 12,000 followed by 12,500 levels. Marginal Call writing was seen at strike prices 12,200 and 12,300 while there was Put writing at 11,800 and 11,500. Options data suggested a wider trading range between 11,400 and 12,000 levels.
Bank Nifty opened with a gap up and witnessed sustained buying interest throughout the session to extend its gains towards 25,750 level. It gained more than 750 points and formed a Big Bullish Candle on the daily scale, which suggested complete dominance by the bulls. The index relatively outperformed the benchmark index and managed to close above the previous hurdle at 25,250 level. Now, the index has to hold above 25,250 level to witness a bounce towards 26,000 and then 26,250 levels, while immediate key support was seen at 25,000 level.
Nifty futures closed positive at 11,824 level with a gain of 1.21 per cent. The trade setup looked positive in ICICI Bank, HDFC, HDFC Bank, SBI, Axis Bank, Sun Pharma, Bajaj Finance and Hero MotoCorp, while weakness was seen in RIL, UPL, Godrej Properties, Bata India and HCL Tech.
(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)
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