Nifty bounce back may face hurdle at 16800; watch Reliance, Titan, Vedanta, other stocks for action

By Shivangi Sarda

Nifty index opened negative on Wednesday but managed to trade in a range of 200 points throughout the session. It witnessed selling pressure in the first half but seen a quick pullback move in the last hour of the session. It formed a Harami Cross and an Inside Bar sort of formation on daily scale and closed with losses of around 187 points.

India VIX was up by 2.32% from 28.57 to 29.23 levels. Overall higher volatility could continue to signal wider swings in the market and it needs to cool down below 22-24 zones for a smooth ride. On Option front, Maximum Call OI is at 18000 then 17000 strike while Maximum Put OI is at 16500 then 16000 strike. Marginal Call writing is seen at 16800 then 16700 strike while marginal Put writing is seen at 16500 then 16600 strike. Option data suggests a wider trading range in between 16200 to 17200 zones while an Immediate trading range in between 16400 to 16850 zones.

Bank Nifty needs to hold above 35500

Bank Nifty opened gap down and remained weak throughout the day. It breached its immediate support zones but saw quick recovery and closed near its day’s high. It formed a Dragonfly Doji sort of candle on daily scale but continues forming lower highs from the last four sessions.

For weekly Bank Nifty, Maximum Put OI is at 35000 then 33000 strike and maximum Call OI is placed at 38000 then 37500 strike. We have seen Call writing in 36000 while Put writing is witnessed at 34500 with significant unwinding at 36000 strike. Now it has to hold above 35500 zones for an up move towards 35750 and 36000 zones while on the downside support exists at 34750 and 34500 levels.

Now till Nifty remains below 16666 zones, bounce could be sold with hurdle of 16800 for a downside move towards 16400 and 16200 zones. Nifty and Bank Nifty are witnessing range bound move with momentum fizzled out at higher zones and advised to be with stock specific action in Coal India, SBI Life, Tata Steel, Hindalco, NMDC, GAIL, Jindal Steel Power, National Aluminium, SAIL, JSW Steel, BEL, Vedanta, Titan, Reliance Industries, Mphasis, Apollo Hospital, Siemens, PVR and Powergrid.

(Shivangi Sarda is Quantitative Analyst, Derivatives and Technical Research at Motilal Oswal Financial Services. Views expressed are the author’s own. Please consult your financial advisor before investing.)