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F&O: Nifty signals it’s unable to hold at higher levels; VIX eases some bit

Nifty50 opened with a gap down on Friday and remained rangebound in the first half of the session before it cascaded and drifted towards the 14,600 level in the second half. Nifty ended the first session of May F&O series and last session of April in the red with a loss of around 260 points. The index negated the formation of higher highs and lows of last five sessions.

Technically, it formed a bearish candle on the daily chart, but a bullish candle on the weekly timeframe chart with a long upper shadow, indicating that it is unable to sustain at higher levels. Now, it has to cross the 14,700 level to see a bounce towards 14,900 and 15,050 levels, while on the downside support exists at 14,400 and 14,250 levels.

India VIX fell 1.17% from 23.30 to 23.02 level. The fear gauge needs to hold below 20 level to again be able to create a bullish bias.

Since, it is the beginning of new series, options data lay scattered at different strike prices. On the options front, maximum Put Open Interest (OI) stood at 14,000 level followed by 13,500, while maximum Call OI was seen at 15,000 followed by 15,500 levels. Options data suggested a wider trading range between 14,000 and 15,200 levels.

Bank Nifty opened with a gap down and moved southward throughout the day. Banking stocks faced sustained pressure during the session and Nifty breached the 32,700 level and settled the day with a huge loss of around 930 points. The index formed a bearish candle on the daily scale, but a bullish candle along with long upper shadow on the weekly chart. It negated the formation of higher highs of last seven sessions. Now as long as it holds below 33,333 level, the index may see weakness till 32,500 and 32,150 levels, while resistance can be seen at 33,333 and 33,500 levels.

Nifty futures closed negative at 14,663 level with 1.80 per cent loss. Among specific stocks, the trade setup looked bullish in SAIL, SUN TV, Concor, Grasim, Divi’s Lab, Tata Chemicals, Apollo Tyre, Federal Bank, Glenmark, UBL,

, Dr Reddy’s and Aurobindo Pharma but weak in HDFC, PVR, , AU Bank, RBL Bank, M&M, , TCS, Havells, Maruti 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)

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