F&O Manual | Nifty continues to gain for sixth straight session, experts see supply pressure at 19,400

The market traded in the green for yet another session on July 4, albeit with little volatility amid mixed global cues and positive domestic signals. At 11.30am, the Nifty 50 index added 19 points to 19,341. Bank Nifty also supported the momentum, gaining 0.26 percent to 44,277.30.

Bars reflect change in OI during the day. Red bars show call option OI and green put option OI.

On the option front, call writers were dominant during the day. Key straddle position was seen at 19,350 levels, while 19,400 marked supply zone for the index. The immediate support level has shifted higher towards 19,000, while the immediate reciprocal retracement targets come around 19,440 – 19,500 levels.

The bullish trend continues as the winning streak extends for the sixth straight session. “After a period of consolidation, the market has quickly surged by over 700 points since last Monday’s low. This upward trend is expected to persist in the near future, as indicated by significant breakouts on higher timeframe charts,” Sameet Chavan, Research Head for Technical and Derivatives at Angel One, said.

“Due to the rapid surge in recent sessions, indicators are entering an overbought zone, and with prices deviating significantly from the 5EMA on the daily chart, there is a possibility of occasional dips or sideways consolidation,” he said.

Chavan advised traders to take some profits and view any dip as a buying opportunity.

Blue bars show volume and golden bars open interest (OI)

Bank Nifty, after seeing a strong bullish trend, showed a small dip towards negative, yet managed to sustain the positive momentum. Santosh Pasi, a major derivatives trader and analyst, is bullish on the BankNifty with July month expectation at 45,000-45,500 level. “The support zone remains at 45,000. On the upside, 45,300 -45,500 can be considered as immediate resistance for the weekly expiry session.”

Among individual stocks, BFSI sector saw a heavy long build up. Bullish traders accumulated long positions in Bajaj Finance, PNB, Bajaj Finserv, Federal Bank, Cholamandalam Invt and Finance, Canara bank.

Eicher Motors, IDFC First bank, L&T finance Holdings were among those that saw short buildup.

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