Nifty: F&O: Nifty looks all bullish; bank stocks end the underperformance

Nifty opened a positive open on Thursday and hit a new high of 17,644. Bulls led the index and kept buyer interest at higher levels. The index had the highest daily close on record above 17,600 and stabilized with a gain of around 110 points. It has formed a bullish candle on a daily scale and has hit higher highs for the past three sessions. Now it needs to continue to hold above the 17,600 level to extend the move towards 17,700 and 17,777 while on the downside support has moved to the 17,500 and 17,300 levels.

India VIX rose 1.10% from 13.58 to 13.73. India VIX needs to hold below level 13 to continue its bullish momentum.

On the options front, the maximum Put Open Interest was 17,000, followed by 16,500 levels, while the maximum Call OI was 17,500 followed by 17,300 levels. There was a call write at 17,900 then 17,600 levels while put write was seen at 17,400 and then 17,300. Options data suggests a wider trading range between 17,200 and 17,800 levels and an immediate trading range between 17,350 and 17,700 levels.

Bank Nifty opened positively and saw a break out of its consolidation range. Bank stocks outperformed the market after a long period of underperformance. It broke through the 37,700 level and closed near the day’s high with a gain of 820 points. It formed a strong bullish candle on the daily scale and experienced the highest daily close on record. Now it needs to hold above the 37,700 level to see a rebound towards the 38,000 level, while on the downside support was seen at 36,900 and then 36,500.

Smart Futures closed positively with a gain of 0.88% to the 17,538 level. Among specific stocks, the trade setup appeared bullish in Idea, Indus Tower, IndusInd Bank, ITC, Cholamandalam Investment and Fin Co, SBIN , Canara Bank, Shriram Transport Fin Co, HPCL, Kotak Bank, Aarti Industries, ICICI Bank, IOC, Reliance, Axis Bank, Hero Motocorp and Apollo Hospital but weak in Lupine, ACC, SunTV, Ramco Cement, Grasim, Jindal Steel, McDowell and Colgate-Palmolive.

(Chandan Taparia is a Technical and Derivatives Analyst at MOFSL. Investors are advised to consult financial advisers before making an investment call based on these observations)