NIFTY remained volatile throughout the week in a wider trading range from 11800-12000 levels and faced stiff resistance at 12000 marks which have been acting as a crucial resistance zone. On the weekly scale, Nifty has formed DOJI candle for continuous two weeks, thus indicating that bulls and bears both are making their share of attempts to drag the index on either side. However, the short term trend for Nifty continues to be range-bound with a slight negative bias. We expect a soft start on Monday with some range bound trade. As long as it trades below 12050 levels we expect some consolidation in the range of 11800-12000 zone.
On the derivative front, Put writers were active in 11900, 11800 and 11700 strikes where maximum OI concentration is placed at 11800 strikes.
continuous call writing at 12000 strikes in the weekly as well as monthly expiry is hinting that upside is capped.
BANKNIFTY outperformed in the previous week and sustained its positive momentum for the 6th consecutive week even after some profit booking being seen in the Nifty index. Now, the overall structure still looks positive towards 31500 and 31700 where immediate support is placed at 30300. The weekly MACD is well in the buy mode and its trading above the zero reference line which is positive for the bulls in the short to medium term. For the Nifty index to reclaim its positive momentum Banknifty has to continue with its positive momentum.
KOTAK BANK had provided breakout from its downward sloping trend line on the weekly scale and is moving again after retesting the same levels. Thus the overall structure works in the favour of the bulls and So one can expect the rally to move towards its immediate resistance of 1684 than 1720 levels while on the downside 1580 will act as an important support zone.
Author: Mr.Nilesh Ramesh Jain, Derivative and Technical Analyst (Investment Services), 15th November 2019