By Chandan Taparia
The NSE benchmark Nifty witnessed a highly volatile session ahead of its October series expiry. The index opened in the green, but failed to surpass the 10,300 level and corrected sharply towards 10,126.
However, it recovered more than 100 points from the intraday low and formed a Hammer candle followed by a Doji on the daily chart.
The index is witnessing a tug of war between the bulls and the bears near to its major juncture of 10,200 zone. Now, it has to hold above the 10,200 level with a follow up buying interest to head towards 10,280 and then 10,333-10,350. On the downside. supports were seen at 10,138 and then 10,100 levels.
On the option front, maximum Put OI was at 10,000 followed by 10,200 strike, while Call OI congestion was seen at 10,300 followed by 10,400 strikes. We have seen Call writing at 10,300, followed by 10,250 strike, while Put writing was seen at 10,000 followed by 10,200 strike. Option band signifies an immediate trading range between 10,138 and 10,333 levels.
India VIX fell down 0.84 per cent to 18.88. However, VIX has to fall below 17-16 zone to rescue the bulls after sharp cut of the last two months.
Nifty Bank index opened in the green, but failed to hold above the 25,350 zone, and remained consolidative with the downside support of 24,800-24,750 zones. It closed higher than the previous days close, but lower than its opening levels, which indicates that the bulls and the bears are both fighting hard near the 25,000 level. Now, it has to hold above the 25,000 level to witness an upmove towards 25,250 and then 25,350-25,400 zone, while on the downside, supports are seen at 24,850 and then 24,750-24,650 zones.
Nifty futures closed higher with a gain of 0.92 per cent at 10,241. Longs were seen in Asian Paints, M&M Finance, Bajaj Finance, Engineers India, Nestle and IOC, while shorts were seen in Bajaj Auto, Mindtree, Yes Bank and Britannia.
(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)