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F&O: Nifty50 setup looks bullish; options signal wider trading range

Nifty on Friday opened positive and after witnessing some pressure in the initial hour of the day, the index recovered from intraday low at 15,772 level. It moved in the positive territory and closed with a gain of around 60 points. Nifty formed a small-bodied bullish candle on the daily scale and saw the second highest ever daily close. It formed a bullish candle on the weekly scale and regained its decline of last week with highest ever weekly close. Now, it has to hold above 15,800 level to witness a rise towards 16,000 and 16,200 levels, while on the downside support can be seen at 15,700 and 15,600 levels.

India VIX fell sharply by 11.47% from 15.09 to 13.36 level. The fear gauge has failed to move above 16-16.50 level in the last three weeks and hovered near its lowest level of last 17 months. Lower volatility indicates an overall bullish market bias, but a small bounce in VIX can give some volatile cues to the market.

Since it is beginning of new series, options data lay scattered at different strikes. On options front, maximum Put OI was seen at 15,500 level followed by 15,000 strike while maximum Call OI was seen at 16,000 level followed by 16,500. Call writing was seen at 16,400 and 16,500 levels, while there was Put writing at 15,800 and then 15,400 levels. Options data suggested a wider trading range between 15,500 and 16,200 levels while an immediate range is seen between 15,700 and 16,000 levels.

Bank Nifty opened positive and moved northward throughout the day. Banking stocks took the index to 35,491 level and recovered the losses of the last week. It formed a bullish candle on the daily scale and a bullish engulfing candle on the weekly frame. Now it has to hold above 35,250 level to move up towards 35,750 and 36,000 levels while on the downside support exists at 35,000 and 34,750 levels.

Nifty futures closed positive with a gain of 0.29% at 15,879 level. Among specific stocks, the trade setup looked bullish in Nationalum, Apollo Hospital, MFSL, Tatasteel, Cumminsind, Axis Bank, Glenmark, SBIN,

, BEL, SRF, Tata Power, , , Muthootfin, Bajajfinserv, Infy and LT but weak in Reliance, Hindunilvr, ONGC, MGL and IOC.

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