F&O: Nifty outlook bullish till it holds above 11,980-12,000 zone

Maximum Put open interest was at 12,000 followed by 11500 strike.

By Chandan Taparia

The new derivatives series kicked off on a negative note on Friday, as Nifty saw selling pressure due to unfavourable cues from Asian bourses. The benchmark indices started correcting from initial trades and continued to make lower lows in the first half of the session.

However, due to some bounce in the later half, Nifty ended the session a tad above 12,050 and formed a Red body candle on the daily chart.

The index concluded the week with gain of 1.19 per cent and formed a green body candle on weekly chart.

A positive momentum after the formation of three consecutive Doji candles on weekly chart is a positive sign for the market. Thus, till the time Nifty holds above 11980–12000, we maintain our positive stance on the market for an upmove towards 12,250.

On the December monthly options front, Maximum Put open interest was at 12,000 followed by 11,500 strike, while maximum Call OI was at 12,500 followed by 12,600 strike. Call writing was at 12,100 and 12,300 strike, while marginal Put writing was seen at 11,800 strike. Option data suggests a shift in trading range between 11,900 and 12,300 levels.

India VIX eased 0.66 per cent to 13.89. Till VIX remains below 15 zone, then we may see continuation in the ongoing optimism in coming days.

Bank Nifty started the session on a negative note and corrected in the first half of the session. However, some buying interest was witnessed in the later half and it formed a small red body candle on the daily chart. The banking index took support around its previous swing high of 31,783 and rebounded piercingly, which is a positive sign for the index. It made a higher high for the seventh consecutive week and formed a big green candle on weekly chart, which clearly shows strength in the index. Until it sustains above 31,783, an upmove toward 32,500 and 32,800 cannot be ruled out.

Nifty futures fell 0.44 per cent to 12,092. Builtup of long positions were seen in Bharti Infratel, L&T Finance, NBCC, PVR and Tata Global Beverages, while shorts were seen in YES bank, Motherson Sumi, Apollo Tyre, Tata Motor and ZEE.

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