F&O: Put writing at all immediate strikes shows Nifty may hold up
The Nifty50 index opened in the negative but managed to recover sharply from lower levels and headed towards the 10,750 level on Wednesday. It formed a Piercing Line pattern on the daily scale, as it recovered its losses of the last session by more than a half. It has been making lower lows from last four sessions and holds above the 10,750-10,777 zone can negate the same to extend its recent bounce towards 10,850 and then 10,929 levels.
Nifty has reclaimed its 50-day EMA while on the downside it has support at 10,650 and then 10,600 levels.
On the options front, maximum Put OI was at 10,000 followed by 10,500 and 10,700 levels, while maximum Call OI was at 11,000 followed by 10,900 level. Meaningful Put writing was seen at all the immediate strike prices from 10,650 to 10,500 level, which suggests support is intact while Call unwinding was seen at most strike prices till 11,000 level. The options band signified a trading range between 10,600 and 10,800-10,850 zone.
India VIX remained flattish at 15.92 with a marginal gain of 0.17 percent. The VIX has to hold below 16 to get a bullish momentum, else a tough fight could be back in the market.
Bank Nifty witnessed a strong recovery from lower levels and recovered more than 600 points from its intraday low of 26,400. It has taken support near its 50-day EMA and formed a bullish engulfing pattern on the daily scale. Now it has to hold above the 26,666-26,850 zone to extend its move towards 27,200 and then 27,350 levels, while on the downside, major support exists at 26,666 and then 26,400 levels.
Nifty futures closed positive at 10,755 with a gain of 0.69 percent. The long buildup was seen in Equitas, Shriram Transport, LIC Housing, HDFC, JSW Steel, M&M Finance, Repco Home, SiemensNSE 4.04 % and McDowell, while shorts were seen in DaburNSE -0.76 %, TCS, OIL Indians -0.43 % and Yes BankNSE -1.56 %.