The NIFTY Index of the National Stock Exchange needs to hold above 11150 marks to witness an up-move towards the recent swing high in the 11333-11350 zone and then the 11500 levels. The traders in the stock market went for a ‘buy on decline’ strategy on Monday 10th August 2020. Nifty opened flattish but it remained consolidative for most of the session.
The index formed a small bullish candle but an inside bar as it is traded inside the trading range. Overall, the index has remained in a range but developed higher lows, even though supports have moved marginally higher over the last three sessions. India VIX (Volatility Index) fell 2.47 percent to level 22.57. A gradual decline in VIX from its recent bounce of 25.69 suggests that the bulls are using any decline as a buying opportunity and the overall trend for a potential range breakout could remain bullish.
Maximum Put open interest was seen at 11,000 followed by 10,000 levels, while maximum Call OI was 11,500 followed by 12,000 at the strike price. Minor Call writing was seen at 11,500 and 11,600 strike prices, while Put writing was recorded at 11,000 then 11,100 levels. Data on options suggested an immediate trading range of between 11,000 and 11,500 levels over the next few days.
The Bank Nifty opened flat and it remained consolidative in the 350-point range between 21450 and 21800 levels. This formed an Inside Bar as it is traded inside the range of the previous sessions and it hovered near its 50-day Exponential Moving Average (EMA). Technical indicators are on the verge of appearing and they need decisive follow-up action to confirm the next momentum. According to the report, if the NIFTY index manages to hold above the 21500 levels, then a bounce can be seen towards the 22000 levels and 22250 levels, while on the downside immediate support is seen at the 21,250 and then 21,000 levels.
Nifty futures are a derivative contract which means its value is derived from the conduct of its underlying asset. Nifty futures contractually grant the seller or buyer the right to trade the stocks on the Nifty50 index on a future date at a pre-decided price. This is currently one of India’s most liquid futures contracts which also makes it the most traded. Nifty futures closed positive at 11,229 level with a gain of 0.26 percent. There was a bullish trend in the various trade setups – SRF, Britannia, Asian Paint, Bajaj Finance, Apollo Hospital, tata Motors, Cummins India, Maruti, Divi’s Lab. Whereas, There was a week trend in Biocon, HPCL, MGL, and BHEL.
