*Pre-Market Derivatives and Technical Set-up*
● Nifty index opened gap down and remained in negative territory throughout the day. It fell by around 160 points from its intraday high of 9281 and formed a bearish candle on daily chart. We also witnessed formation of a Bearish Island Reversal pattern on daily scale, indicating bearishness in the market. Momentum oscillator RSI also turned southward on daily chart, which is a negative sign for the index
● Considering overall chart structure, we may see a correction towards 9000 then 8800 zones. On the flipside, major hurdle is placed at 9350 and then 9450-9500 zone
● On monthly options front, Max Call OI is at 10000 then 9500 strike while Max Put OI is at 9000 then 8000 strike. We have seen Put writing at 8500 then 8800 strike whereas Call writing was seen at 9500 then 9300 strike. Option data indicates an immediate trading range in between 8800 to 9500 zones
● India VIX moved down by 1.67% at 38.18 levels. Overall higher volatility could continue to keep roller coaster ride in the broader trading band
● Bank Nifty started the session on a negative note and remained in a narrow range of 350 points throughout the session, which is a narrowest daily range after February 2020. Eventually, banking index concluded the session with loss of around 3% and formed a Bearish candle on daily chart. It is sustaining below Trendline breakdown level and 20 DEMA, which doesn’t bode well for the bulls
● Looking at the current structure, till the time it sustains below 19500, we may see selling pressure towards 18300 - 18000 zone. While resistance can be seen at 19500 and then 19800-20000 zones
● Longs in Bharti Infratel, Glenmark, Godrej CP, Cadila Healthcare and Balkrishna Inds
● Shorts in LIC HsgFin, Mindtree, Motherson Sumi, Cummins and Infosys
*Technical & Derivatives Research, Motilal Oswal*
