market analysis: F&O: Nifty again forms lower highs & lows; bank counter looks bearish

Nifty opened negative on Friday and moved sideways through the first half of the session. The index saw a sharp decline and slipped below 14,900 level in latter part of the session, which was followed by some recovery. Finally, the index settle the last session of the week with a loss of around 140 points. The index formed a bearish candle on the daily scale and a Bearish Engulfing candle on the weekly chart.

It continued to form lower highs and lows for the third session in a row. As long as it remains below 15,150 level, Nifty could continue to see weakness and head towards its next key support at 14,800 and 14,700 levels, while on the upside hurdles are seen at 15,250 and 15,400 levels.

India VIX rose 3.30% from 21.54 to 22.25 level. VIX needs to cool down and hold below 20 level to attract support-based buying and again make an attempt to go towards its lifetime high with a higher market base.

On the options front, maximum Put Open Interest stood at 14,000 and then 15,000 levels, while maximum Call OI was seen at 16,000 followed by 15,500 levels. There was Put writing at 14,800 and 14,900 levels, while Call writing was seen at 15,200 and 15,000 levels. Options data suggested a wider trading range between 14,700 and 15,500 levels, while the immediate range was seen between 14,800 and 15,200 levels.

Bank Nifty opened with a gap down and escalated downwards throughout the session to touch an intraday low of 35,584. Bank stocks continued to trade weak and that dragged the index, which settled the session with a loss of around 750 points. The index formed a bearish candle on the daily scale and formed lower highs and lows for the third session in a row. Now as long as it remains below 36,500 level, it may continue to see weakness and head towards 35,500 and 35,000 levels, while on the upside, a major hurdle exists at 37,000 level.

Nifty futures closed negative at 15,006 level with a loss of 0.72%. Among specific stocks, the trade setup looked bullish in Tata Chemicals, Concor,

, , Marico, Jubilant Foodworks, , RIL and NTPC but weak in , Apollo Hospital, PFC, BEL, Bharat Forge, Biocon, Tata Steel, Hero MotoCorp, Cadila, Escorts, SRF, Exide Industries and Lupin.

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