F&O: Market to see major selloff if Nifty slips below 11,888 mark

In monthly options, maximum Put open interest was at 12,000 followed by 11,500 levels.

By Chandan Taparia

Nifty started the week with marginal gains and remained volatile throughout Monday’s session. The index took support around its Friday’s low point at 11,888 and formed a Doji candle on the daily chart, which indicated indecisiveness among the market participants.

During the week gone by, the index formed a Bearish Engulfing pattern on the weekly chart. Now a sustainable move below the 11,888 mark may trigger a correction towards 11,800 and then 11,700 levels. On the flipside, the immediate hurdle is placed at 12,050 and then at the all-time high of 12,158.

In monthly options, maximum Put open interest was at 12,000 followed by 11,500 levels, while maximum Call OI was at 12,000 followed by 12,200 levels. Marginal Call writing was seen at strike price 12,000, while there was Put writing at 11,900 and 11,800 levels. Options data suggested a shift in lower trading range between 11,700 and 12,100 levels.

India VIX moved up 7.02 per cent to 14.59 level.

In line with the broader market, Bank Nifty remained volatile throughout the session and formed a Doji candle on the daily chart. The banking index failed to sustain above the breakdown level of a Double Top pattern on intraday chart and concluded the session with negligible loss. Till the time Bank Nifty sustains below its immediate hurdle in the 31,500-31,600 zone, we may see a corrective move towards its next support at 31,000 and 30,800 levels.

Nifty futures closed positive at 11,967 with a negligible gain of 0.09 per cent. Long buildup was seen in Dish TV, Century Textiles, MGL, Canara Bank and M&M Finance while shorts were seen in Indiabulls Housing Finance, Apollo Hospitals, Ujjivan, BHEL and Cipla.

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