F&O: Options signal Nifty range in 12,000-12,300 zone

India VIX moved up by 1.83 per cent to 13.61.

By Chandan Taparia

NSE Nifty remained in a consolidative mood this week, as it traded in a 250-point range between 12,000 and 12,250 levels. The index managed to hold its support at 12,000, but followup buying was missing at higher levels, as it failed to hold above 12,250, and closed on a flattish note for the week.

The index formed a Doji candle on the weekly scale and a bearish candle on the daily chart, which indicates a tug of war between the bull and bears, with some supply at higher levels.

At the current juncture, Nifty has got stuck in a range, and till the time it holds above 12,000, we may see ongoing optimism with consolidative move towards 12,250.

On the options front, maximum Put open interest was at 12,000 followed by 11,800 strike, while maximum Call OI stood at 12,500 followed by 12,400 strike. Call writing was mainly seen at 12,200 followed by 12,300 strike, while Put unwinding was seen at all the immediate strikes. Options data indicates an immediate trading range between 12,000 and 12,300 levels.

India VIX moved up by 1.83 per cent to 13.61.

Bank Nifty has witnessed profit booking in the last two trading sessions, as it failed to surpass the immediate hurdle at 31,750, and corrected around 900 points in two days. It formed a bearish candle on daily as well as on weekly scales, and drifted below its 50-DEMA. The index underperformed benchmark Nifty and got stuck in a broader trading range with limited upside. Now, it has to continue to hold above 30,500 to witness an upmove towards 31,500 and then 31,750, while on the downside, major support is seen at 30,200.

Nifty futures fell 0.37 per cent to 12,129. Long builtup was seen in Mindtree, Bharti Airtel, SRF, Shriram Transport Finance Company and Indigo, while shorts were seen in Bharti Infratel, IGL, Indusind Bank, Gail and Eicher Motors.

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