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F&O: India Vix on verge of trendline breakout; Nifty range shifts lower

India VIX fell 0.60 per cent to 16.89 levels.

Last Updated: Feb 25, 2020, 04.57 PM IST
On the options front, maximum Put open interest stood at 11,800 followed by 11,700 levels.
By Chandan Taparia

Nifty50 opened on a positive note on Tuesday, but failed to move higher, as selling pressure emerged from initial trades. The index continued to make lower highs and lows for the second consecutive day and concluded the session a tad below the 11,800 mark. It sustained below the previous week’s low and formed a small red body candle on the daily chart.

At its current juncture, the index hovers around the previous gap area between 11,750 and 11,783 levels (gap of Feb 4). However, major support remains intact around the 200 EMA, which is placed around the 11,700 mark.

As long as, Nifty sustains below 11,900, the structure would remain sideways to negative and we may see selling pressure on intraday bounces. Above the 11,900 mark, a major hurdle is placed in the 12,000 – 12,050 zone.

On the options front, maximum Put open interest stood at 11,800 followed by 11,700 levels, while maximum Call open interest was at 12,000 followed by 12,200 levels. There was significant Call writing at strike prices 11,900 to 12,200 while Put unwinding was seen at all immediate strike prices and minor Put writing is seen at 11,800. Options data indicated a shift in the lower trading range to 11,700-12,050 zone.

India VIX fell 0.60 per cent to 16.89 levels. However, it is on the verge of seeing a trendline breakout. If it moves above the 18-18.50 zone, we may see further volatility in the market.

Bank Nifty opened marginally in the green and remained volatile in a narrow range. For the second consecutive session, it fell relatively less compared with the benchmark index and formed a small-bodied candle on the daily scale. Momentum oscillator RSI was placed negatively on the daily scale and showed some weakness in the index.

Going forward, the ongoing correction may extend the index towards 30,250-30,000 zone, while major resistance remains intact at 30,700 and then 31,000 levels.

Nifty futures closed flat at 11,834. Long buildup was seen in Mindtree, Havells, DLF, Ujjivan and TCS while shorts were formed in IndiGo, PEL, Ashok Leyland, Amaraja Batteries and Dr Reddy’s Lab.

(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

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