Hot Stocks: Nifty options distribution suggests a range of 12,000-12,300 for the market

Episode 2246,   Feb 20, 2020, 01:30 AM

After four consecutive days of decline, the Nifty50 has seen a strong bounce back in Wednesday's session. The Nifty saw a gap-up opening and after a dip in early trade, it managed to close around days high.

The Nifty50 was up by 1.11 percent to close at 12,126 levels. The broader market indices outperformed the benchmark with BSE Midcap and BSE Smallcap gaining 1.34 percent and 1.41 percent for the day.

Market breadth on NSE was positive with almost two stocks advancing against one decline. Tuesday’s bullish hammer candlestick has been seen follow-through action with a gap up opening to close near days high.

However, the congestion zone high of 12,272 prior to fall will act as resistance for the market. It needs to be crossed for markets to rally towards 12,500 levels.

On the downside, the immediate support is seen at 12,030 and then at 11,900 levels. A break below 11,900 levels will indicate a resumption of the downtrend and decline towards 11,750 levels.

In the Nifty February monthly expiry options, maximum open interest for Put is seen at strike price 12,000 and 11,800; while for Call maximum open interest is seen at 12,300 followed by 12,500.

Put writing was seen in immediate strike price 12,100 and 12,000 indicating supports shifting higher. Nifty options distribution is suggesting a range of 12,000-12,300 for the market.

India VIX closed at 14.02 down by 3.36 percent for the day. VIX has seen a bounce back after last week’s volatility and crossing above 14.5 levels will keep the pressure on the market. However, sustaining below 14 levels will be supportive of equity markets.