Nifty index opened positive and extended its gains towards 11,360 zones but remained highly volatile throughout the session as it traded in a broader trading range of 180 points on October 11.
It formed a bullish candle on daily as well as weekly scale with long upper and lower shadow which implies that dips are being bought but at the same time supply is intact at higher levels.
Now, it needs to continue to hold above 11,250 zones to witness a bounce towards 11,400 then 11,500 zones while on the downside major support is seen at 11,180 then 11,100 levels.
India VIX fell down by 2.5 percent from 17.58 to 17.14 levels. On the options front, Maximum Put OI is at 11,000 followed by 11,200 strike while maximum Call OI is at 11,500 followed by 12,000 strike.
Marginal Put writing is seen at 11,000, then 11,300 strike while Call Unwinding is seen at all the immediate strike. Option data suggests a wider trading range in between 11,000 to 11,600 zones.
Bank Nifty remained highly volatile and continued to trade in wider range between 27,500 to 28,600 zones. It formed a Bearish Candle on daily scale while small bodied candle on weekly scale with long upper shadow which suggests that selling pressure is seen at higher zones.
It has got stuck in broader trading range between 27,500 to 28,800 levels from past six trading sessions and volatile swings are likely to continue in this wider range. Now it needs to hold and sustain above 28,250 zones to witness a bounce towards 28,550- 28,800 zones while on the downside major support is seen at 27,500 zones.
Stock specific positive view is on HDFC Life, Hindustan Unilever, Bata India, Tata Global, ICICI Bank, IGL and Berger Paints while weakness could continue in RBL Bank, Piramal Enterprises, Yes Bank and PSU Banks, etc.
Option traders can go with Bull Call Ladder with the view to multiple support at 11,180-11,100 zones while hurdle at 11,500 to 11,700 zones.
(The author is Associate Vice President | Analyst-Derivatives at Motilal Oswal Financial Services)
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