INSUBCONTINENT EXCLUSIVE:
By Chandan TapariaNifty opened negative on Monday and witnessed sustained selling pressure throughout the day till the end of session amid a
major selloff in global bourses
The bears were active from the word go
As a result, Nifty continued to make lower lows as the day progressed and ended the session near to its lowest point.
The index formed a
Bearish Marubozu candle on the daily chart, indicating complete dominance of the bears throughout the day
The index breached a major support at 11,900 level and closed below the 100 DEMA by declining 250 points intraday.
Going forward, the
ongoing correction may continue and take Nifty towards its next support at 200 EMA, which is placed around 11,700 level, while the
levels, while maximum Call OI was at 12,000 followed by 12,200 levels
There was seen significant Call writing at strike prices 11,900 to 12,200
On the other hand, Put writers at strike prices 12,000 and 12,100 were seen running for cover their shorts; while fresh Put writing was seen
at 11,700 followed by 11,600 levels
Options data indicated a shift in trading range to the 11,700-12,100 zone.
India VIX moved up 24.07 per cent to 16.99 level
It was in the verge of seeing a trendline breakout
If it moves above the 18-18.50 zone, then we may see further volatility in the market.
Bank Nifty opened with a downside gap and remained in
the negative territory throughout the day
It relatively fell less compared with the benchmark index, but corrected 1.58 per cent and formed a bearish candle on the daily
chart.
Momentum oscillator RSI turned southward and showed some weakness in the index
Since the banking index breached its major support at 30,600 level, the ongoing correction may extend towards 30,250 and then 30,000 levels
Long buildup was seen in MFSL, Muthoot Finance and YES Bank while shorts were seen in Aurobindo Pharma, Jindal Steel, JSW Steel, Motherson
Sumi and Vedanta.
(Chandan Taparia is Technical - Derivative Analyst at MOFSL
Investors are advised to consult financial advisers before taking an investment calls based on these observations)