market analysis: F&O: Market seeing buying at lower levels, but Nifty50 is stuck in a range

Nifty on Friday opened flat and remained consolidative right from the opening trade. It breached the previous day’s low, but didn’t sustain at lower levels. The index got stuck in a range and concluded the session with a loss of around 40 points. It formed a Doji candle with a long lower shadow on the weekly chart and a small bearish candle on the daily scale, indicating buying at lower levels.

Now, it has to decisively cross and hold above 14,880 level for a bounce towards 15,000 and 15,100 levels, while on the downside support exists at 14,750 and 14,650 levels.

India VIX fell 2.58% from 20.31 to 19.78 levels. Lower volatility and a hold below 20 level could help keep the market favourable for a buy-on-declines strategy.

On the options front, maximum Put Open Interest stood at 14,000 level followed by 14,500, while maximum Call OI was seen at 15,000 followed by 16,000. Minor Call writing was seen at strike prices 15,000 and then 15,200 while there was minor Put writing at 14,800 level.

Options data suggested a wider trading range between 14,500 and 15,200 levels.

Bank Nifty opened with a cut and remained negative to rangebound for most part of the session. Banking stocks witnessed weakness and dragged the index to 32,300 level. It finally concluded the session with a loss of around 330 points. The index formed a bearish candle on the weekly as well as daily charts. Long upper shadows during the day indicated selling pressure at higher levels.

Now till the index remains below 33,333 level, weakness can continue and drag the index downside towards 32,000 and 31,500 levels, while on the upside, hurdles are seen at 33,000 level and in the 33,333-33,500 zone.

Nifty futures closed negative at 14,893 level with a loss of 0.21%. On the stocks front, the trade setup looked bullish in Cadila Healthcare, Cipla, Glenmark, Aurobindo Pharma, Sun Pharma, Adani Enterprise, Lupin, IGL, Sun TV, HUL, TechM,

, , Wipro, Tata Consumers, Titan, Marico, SRF and Pidilite Industries but weak in Bajaj Finance, UPL, Vedanta, McDowell, NTPC, Axis Bank, ICICI Bank and Coal India.

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