F&O: Nifty looks directionless; banking counter looks weak

The index has again got stuck in a range and requires a decisive hold to commence the next leg of rally. It formed a small-bodied bearish candle on the daily scale and a Bearish Hammer sort of candle on the weekly frame. Now, it has to hold above 15,750 zone to witness a bounce towards 15,850 and 15,962 levels, while on the downside support exists at 15,700 and 15,600 levels.

India VIX fell by 1.06 per cent from 12.94 to 12.80 level. A decline in volatility after the roller-coaster ride of the last session has again given a grip to the bulls, but now VIX has to cool down below 12 zone for more comfort.

Since it is the beginning of the new series, options data lay scattered at various far strikes. Maximum Put OI stood at 15,000 followed by 15,500 levels, while maximum Call OI was at 16,000 followed by 15,800 levels. Options data suggested a broader trading range between 15,500 and 16,000 levels.

Bank Nifty opened flat to positive and after a slight dip in the initial tick, it moved towards 34,750 level. However, the last hour of the session witnessed some decline, and it closed with a loss of around 100 points. Banking stocks continued to move in a lacklustre way and comparatively underperformed the broader market. It formed a bearish candle on the daily and weekly charts, and has been forming lower highs since the last three sessions. Now, it has to hold above 34,500 level to move up towards 35,000 and 35,250 levels, while on the downside support exists at 34,350 and 34,000 levels.

Nifty futures closed negative with a loss of 0.15 per cent at 15,782 levels. Among specific stocks, the trade setup looked bullish in SRF, Sun Pharma, TechM, Ashok Leylands, Vedanta, Marico, PVR, Voltas, Dabur,

, , , HCL Tech, PFC, Tata Power and but weak in , Hindalco, and Fin Co, Bharat Forge, IndusInd Bank, Axis Bank, IOC, TCS and BPCL.

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