Nifty: F&O: Nifty forming lower highs, resistance levels slip lower too

Nifty opened flat on Thursday and failed to surpass the 17,750 level as it remained rangebound in the initial half of the session. However, it weakened during the latter part and breached its previous day’s low to head towards a key support at 17,580 level. It formed a bearish candle on the daily scale and closed with a loss of around 90 points.

Nifty has been forming lower highs since the last four sessions and resistance levels have gradually shifted lower. Now it has to hold multiple support at the 17,580 level for any rise towards 17, 777 and 17,850 levels whereas support had shifted lower to 17 450 and 17,350 levels.

India VIX fell 2.32 per cent from 18.83 to 18.40 level. A spurt in India VIX is giving volatile swings and now it has to cool down below the 15-14 zone to help the market continue the smooth ride.

Since it is the beginning of the new series. Option data lay scattered at various far off strike prices. Maximum Put OI stood at 17,000 level followed by 17,500, while maximum Call OI was seen at 18,000 followed by 18,500 levels. Options data suggested a broader trading range between 17,000 and 18,200 levels while the immediate trading range stood between 17,350 and 17,850 levels.

Bank Nifty opened negative and cascaded down to 37,354 level. It closed near the day’s low with a loss of around 320 points. It formed a bearish candle and most of the banking stocks faced weakness. On the downside, it respected its immediate support at 37,300 level. Now it has to hold near 37,300 level to witness a bounce towards 37,850 and 38 000 levels, while on the downside, major support is seen at 37,100 and 36,850 levels.

Nifty futures closed negative with a loss of 0.50 per cent at 17,619 level. Among specific stocks, the trade setup looked bullish in ABFRL, IDEA, Tata Power, Canfin Homes, Dixon, Mcdowell, Ashok Leyland, BHEL, Bajaj Finance, Polycab, DLF, Trent, Alkem, SRF and M&M Fin but weak in Torrent Pharma, Eicher Motor, Axis Bank, Asian Paint, Hero Motocorp, Ambuja Cement, BEL, Muthoot Fin, Ultra Cement and L&T.

(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)