F&O Manual | Benchmark indices trade high, Nifty faces hurdle around 21,800

Indian benchmark indices were trading higher amid favourable global trends on January 11 afternoon. Barring capital goods, all sectoral were are trading in the green.

The broader market, too, gained, with BSE midcap and smallcap indices up 0.7 percent each.

The Nifty needs a move up or down by 250 to 300 points for a directional move, experts said. The index is expected to trade in the 21,500-21,800 range during the day.

At 12.36 pm, the Sensex was up 137 points, or 0.19 percent, at 71,794.71, and the Nifty was up 49.50 points, or 0.23 percent, at 21,668.20.
About 2,087 shares advanced, 1,097 declined, and 80 were unchanged.

Bars in red indicate the change in open interest (OI) of call writers, while the green bars show the change in OI of put writers

The options data suggests that crucial resistance for the day at 21,750 and 21,800 . While a tussle between call and put writers can be seen at 21,650 strike. According to Tejas Shah, Vice President, Technical Research at JM Financial, ” Presently, the market is respecting both the support and resistance levels. The candlestick (Hammer) pattern formed on the daily chart is an encouraging one. The positive key take away for Nifty is that it is still holding above the major support zone of 21,475-500 on a closing basis.”

Broadly, the Nifty has been trading in the 21,500-21,800 range for the past couple of weeks and sellers strong near the upper end — between 21,800 and 21,850. Buyers have repeatedly shown their presence near the lower end at 21,475-21,500 levels. “So we need to wait and watch for either side breakout or breakdown for 250 to 300 points directional move in Nifty, ” Shah said.

The support for Nifty is seen at 21,475-500 and 21,200. On the higher side, the immediate resistance is at 21,650 and the next crucial resistance zone for Nifty is at 21,800-850 levels.

Among individual stocks, Heromotoco, RBL Bank and MGL were seeing a long build up and Polycab, Dr Reddy’s and Infosys a short build up.

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