Tuesday, May 22, 2018

F&O: Fresh Put writing at 10,500 may trigger short-term bounce

The Nifty50 index traded in a range of 50 - 60 points throughout Tuesday's session and closed near its 50-day EMA. It managed to close in the positive after seeing a decline over the past five sessions and formed a small bullish candle on the daily scale. 

However, it continued to form lower highs and lower lows for last five sessions and needs to negate the same to get short-term stability. Now, it has to hold above 10,550 level to witness a bounce towards 10,625 and then 10,650 levels while on the downside, the 10,480 and 10,440 levels are likely to act as key supports. 

On the options front, maximum Put open interest was intact at strike price 10,500 followed by 10,000 while maximum Call OI was at 10,800 followed by 11,000. Significant Call writing was seen at 10,800 followed by 10,700, which is restricting its upside momentum while Put writing was seen at 10,500 followed by 10,400. Maximum Put OI and fresh Put writing at 10,500 is likely to trigger a short-term bounce and consolidate. Option data suggests an immediate trading range between 10,450 and 10,650 level.

India VIX fell by 5.60 per cent to 13.60 level. 

Bank Nifty traded in the trading range of the previous session and formed a Harami Cross candle on the daily scale. It managed to close flattish after the weakness of last five sessions. Now, it has to surpass the immediate hurdle in the 25,950-26,000 zone to get a consolidative move with an upside hurdle at 26,000 and then 26,250 while on decline supports are seen at 25,500 and then 25,250. 

Nifty futures closed in the positive with a gain of 0.15 per cent at 10,555. Long buildup was seen in Page Industriew, SBI, Bata India, Dr Reddy's, McdowellNSE -6.25 %, Havells and Colpal while shorts were seen in IOC, Bharatforg, Ultracemco, Divislabs, Andhra BankNSE -1.29 %, ACCNSE -1.40 %, Axis BankNSE -0.67 %, etc. 

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