Technical
Nifty witnessed another week of range-bound trade as the barometer index has remained in a range of roughly 240 points. On the weekly chart, the index remained above the rising trend line. The weekly RSI is in bullish crossover and rising. The momentum is likely to remain positive as long as the Nifty sustains above 11200. Once it breaks below 11200, the index may drop down towards 10880 in the short term. On the higher end, resistance seen at 11800.
Derivative
Markets traded in a narrow range throughout the week as Nifty option writers took the centre stage. Short gamma positions were the flavour of the week as the Nifty index closed the weak on a flat note, down by ~0.25%. After forming a bearish Dark cloud cover candlestick pattern on the weekly chart, the banking index continued its negative momentum for the third consecutive week as short positions continued to pile up. FIIs index future long/short ratio tumbled below the 1x level as FIIs aggressively added fresh short positions and reduced their long positions in the index futures. India vix index closed the week at 20, down ~4%. On the options front (September 24, 2020 expiry), call option writing was seen in both Nifty & Bank Nifty as the indices trend lower, indicating a sell on rise market scenario for the next week.
