F&O: VIX slips to help bulls; Nifty range is seen at 11,400-11,800


By Chandan Taparia

Nifty opened positive on Wednesday and extended its move towards the 11,620 level. It formed a bullish candle on the daily scale and saw the highest daily close in 12 sessions. The index picked up gain by around 80 points, as the bulls took command and started making higher top and bottom on the lower timeframe charts.

The major trend of the market remains positive and every small decline is getting bought into with a gradual shift to higher trading zones. Now the index has to hold above 11,550 level to witness an upmove towards the 11,750-11,800 zone, while on the downside key support exists at 11,500 and then 11,450 levels.

India VIX fell 4.56 per cent from 20.60 to 19.66 levels. It has slipped below 20 zone with its lowest closing in last 13 sessions. It needs to cool down further towards 20-18 zone to help the bulls get a grip for the next leg of rally.

On the options front, maximum Put open interest stood at 11,500 level followed by 11,000, while maximum Call OI was at 12,000 followed by 11,600 levels. Marginal Call writing was seen at 11,900 and then 12,000 levels, while there was meaningful Put writing at 11,500 and then 11,600 levels. Options data suggested a higher trading range in between 11,400 and 11,800 levels.

Bank Nifty managed to hold key support at 22,222 level and recovered by around 400 points from lower point. However, it has been underperforming Nifty, but multiple support near the 22,000 level has been pushing it higher. The index has been hovering near its 50-DEMA and needs to hold above the same to get a bounce or stability. Now it has to continue to hold above 22,500 level to witness some stability and move towards 22,750 and then 23,200 levels. However, a hold below 22,000 level could drag the rate-sensitive index towards 21,750 and then 21,500 levels.

Nifty futures closed positive at 11,613 level with 0.74 per cent gain. The trade setup looked positive in Ramco Cement, Dr Reddy’s, M&M, Hindalco, Cadila, Britannia, Infosys, Lupin. Divi’s Labs, Wipro, Cipla, Jubilant Foodworks, Mindtree and Ultratech Cement but weak in NTPC, Tata Power, PVR, Bharti Infratel and ONGC.

(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)


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