Stock Market

F O: OI congestion shifts higher as Nifty50 breaks consolidation range

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By Chandan TapariaNifty50 continued its positive momentum and witnessed sustained buying interest throughout Wednesday’s session and headed towards the 11,870 level.

It surpassed the falling supply trend line by connecting the swing high of 12,103, 12,000, 11,843 and 11,814 levels.

It has also seen a breakout of the consolidation range of last seven days between 11,625 and 11,850 levels. The index formed a bullish candle on the daily scale and managed to close above the 50-day EMA.

Now it has to hold above 11,761 level to extend its move towards 11,929 and then 12,000 levels, while on the downside support exists at 11,761 and then 11,720 levels. On the options front, maximum Put open interest was at 11,700 followed by 11,800 level, while maximum Call OI was at 12,000 followed by 11,900 level.

There was meaningful Put writing at 11,800 followed by 11,850 level, while Call writing was seen at 11,950 followed by 11,900.

Fresh Put writing with a shift in Put OI congestion to higher strike price suggests a shift in trading range to the 11,750-11,950 zone. India VIX fell 1.73 per cent to 14.75 level. Bank Nifty opened positive and witnessed buying momentum throughout the session to extend gains towards 31,200 level.

It formed a bullish candle on the daily scale and broke out of the consolidation range of last seven sessions to hold above 31,000.

The index has surpassed the falling supply trend line and negates the formation of lower highs and lows on the weekly scale. Now it has to hold above 30,800 to extend its move towards 31,313 and then 31,500 levels, while on the downside support is seen at 30,600. Nifty futures closed positive at 11,789 with a gain of 0.61 per cent.

There was long buildup in V-Guard, Tata Power, L-T and Power Grid while shorts were seen in Page Industries, Britannia, Godrej Consumers and Apollo Hospital.

(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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