FO Manual: Market still directionless; buy 18,000 call if Nifty falls

Market Outlook
India

Bank Nifty also closed with a drop of over a percent led by selling in PSU Banking names. The index witnessed a false breakout on the upside early in the day but bears hammered it back lower.

It was a difficult day for traders. After opening flat, the Nifty saw a sharp fall and slid about 190 points to 18,042 level. Nifty futures also fell over one percent to end the day at 18102.95. The Nifty faced resistance near a rising trendline and the key daily moving averages for yet another session. (Blue bars show volume and golden bars open interest (OI).)

It was a difficult day for traders. After opening flat, the Nifty saw a sharp fall and slid about 190 points to the 18,042 level. Nifty futures also fell over one percent to end the day at 18102.95. The Nifty faced resistance near a rising trendline and the key daily moving averages for yet another session. (Blue bars show volume and golden bars open interest (OI).)

On the option front, 18,200 saw heavy call writing and has become a big resistance for the index. The index needs to close above this level for any further upside. Nandish Shah, an analyst at HDFC Securities, said the market is directionless now but if it falls further to 18950, then a trader can buy 18,000 calls for the Jan 12 expiry. He added that the market is not likely to fall sharply but volatile moves will continue. (Bars reflect change in OI during the day. Red bars show call option OI and green put option OI.)

On the options front, 18,200 saw heavy call writing and has become a big resistance for the index. The index needs to close above this level for any further upside. Nandish Shah, an analyst at HDFC Securities, said the market is directionless now but if it falls further to 17950, then a trader can buy 18,000 calls for the Jan 12 expiry. He added that the market is not likely to fall sharply but volatile moves will continue. (Bars reflect the change in OI during the day. Red bars show call option OI and green put option OI.)

Bank Nifty also closed with a drop of over a percent led by selling in PSU Banking names. The index witnessed a false breakout on the upside early in the day but bears hammered it back lower. “The undertone remains bearish and one should keep a sell-on-rise approach with immediate resistance at the 43,400-43,500 zone,” said Kunal Shah, Senior Technical Analyst at LKP Securities.(Bars reflect change in OI during the day. Red bars show call option OI and green put option OI.)

Bank Nifty also closed with a drop of over a percent led by selling in PSU Banking names. The index witnessed a false breakout on the upside early in the day but bears hammered it back lower. “The undertone remains bearish and one should keep a sell-on-rise approach with immediate resistance at the 43,400-43,500 zone,” said Kunal Shah, Senior Technical Analyst at LKP Securities. (Bars reflect the change in OI during the day. Red bars show call option OI and green put option OI.)

Gujarat Gas saw massive short buildup with open interest higher by nearly 21 percent. The short build-up is a bearish sign that takes place when the price of a stock falls, along with high open interest and volume. (Bars reflect change in OI during the day. Red bars show call option OI and green put option OI.)

Gujarat Gas saw a massive short buildup with open interest higher by nearly 21 percent. The short build-up is a bearish sign that takes place when the price of a stock falls, along with high open interest and volume. (Bars reflect the change in OI during the day. Red bars show call option OI and green put option OI.)

Indus Towers, Vedanta, Coal India, Atul and Persistent Systems were others that saw short buildup. (Bars reflect change in OI during the day. Red bars show call option OI and green put option OI.)

Indus Towers, Vedanta, Coal India, Atul, and Persistent Systems were others that saw short buildup. (Bars reflect change in OI during the day. Red bars show call option OI and green put option OI.)

On the other hand, Havells saw massive long buildup. A long build-up is a bullish sign that happens when open interest and volume increase with the rise in share price. Among others GNFC, Shree Cement and HPCL saw long buildup. (Bars reflect change in OI during the day. Red bars show call option OI and green put option OI.) Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

On the other hand, Havells saw a massive long buildup. A long build-up is a bullish sign that happens when open interest and volume increase with the rise in share price. Among others GNFC, Shree Cement, and HPCL saw a long buildup. (Bars reflect change in OI during the day. Red bars show call option OI and green put option OI.)
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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Shubham Raj has five years of experience covering capital markets. He primarily writes on stocks with special focus on PMS-AIF industry, telecom and new-age companies. His last stint was with The Economic Times where he wrote on stock markets and led IPO reportage.

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