Derivatives Analysis Report: Nifty Extends Recovery as IT Rally Lifts Index
MUMBAI, 16 OCTOBER: Nifty ended the session at 23,146.15, up 0.65%, continuing a bullish candle with a long lower shadow. The index is holding above the daily Supertrend and the 20 SMA after clearing the breakout level of 23,000, and is now moving towards the 50 SMA.
Nifty IT led the advance, gaining 11.72% for the week to close at 31,924, bringing the index closer to the upper end of its multi-month range.
The RSI of Nifty has climbed to 53 and is holding steady, while India VIX remained unchanged at 14.02.
On the weekly chart, Nifty gained 2.78%, forming a strong bullish candle and closing above the previous week’s high.
On the derivatives front, the heaviest Put OI is at 23,000, followed by 22,700 and 22,900. Call OI is concentrated at 23,500, followed by 23,100 and 23,200. The PCR has eased to 1.33 from 1.65 as Call positions increased above the spot, although the overall ratio continues to favour Put-side positioning.
The immediate support is placed at 23,000, followed by 22,950. On the upside, 23,250 remains the immediate resistance, followed by 23,350.
The setup remains positive, with a buy on dip approach favoured as long as Nifty holds above key support levels.
Nifty Bank ended the session at 55,844, up 0.06%, forming a small candle with a long lower shadow. The index is edging closer to the Supertrend resistance at 56,040, which remains a key hurdle for the recovery.
The RSI stands at 52, holding above the 50 mark and supporting the improving technical setup.
On the weekly chart, Nifty Bank gained 1.06%, posting its second consecutive bullish candle.
The rupee strengthened sharply, with USD INR falling 1.88% over the week to 94.96.
On the derivatives front, the PCR stands at 1.06, easing from 1.08 in the previous session. The heaviest Put OI is at 55,000, followed by 55,500, while Call OI is concentrated at 56,000, followed by 56,500. Unwinding of Call OI at 56,000 would help ease resistance and support a further recovery.
The immediate support is placed at 55,500, followed by 55,400. On the upside, 56,000 remains the key resistance, followed by 56,200.
A sustained move above the 56,000 zone would strengthen the momentum.
Report by: Om Mehra, Technical Research Analyst, SAMCO Securities
(Disclaimer: The information provided here is investment advice only. Investing in the markets is subject to risks and please consult your advisor before investing)
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