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F&O: Vix near 25 mark, Nifty needs to move past 11,333 for a pullback

India VIX fell 1.28 per cent to 24.22 level.

Last Updated: Mar 04, 2020, 05.55 PM IST
Nifty futures closed negative at 11,247 level with a loss of 0.42 per cent.
By Chandan Taparia

Nifty started off on a positive note on Wednesday, but it moved into the negative territory in the ‘blink of an eye’. The bears were aggressive from early hours of trade and dragged the index below the 11,100 mark in first half of the session. However, there was a tremendous recovery in the latter half, as a result of which the index trimmed-off most of the intraday losses.

Eventually, the index formed a Hammer kind of candle on the daily chart, signalling buying interest at lower levels. Currently, the index is hovering around its key support at the rising trend line, which also coincides with the 78.60 per cent retracement level of the previous rally from 10,637 to 12,430 levels. Now, the index needs to decisively move above 11,333 level for a pullback towards 11,433 and 11,500 levels. On the down side, support exists at 11,111 and then 11,035 levels.

On the options front, maximum Call open interest stood at 12,000 and then 11,800 levels, while maximum Put OI was at 11,000 and then 11,300 levels. Marginal Call writing was seen at 11,600 and then 11,300 levels, while there was Put writing at 11,000. Options data indicated a broader trading range between 10,800 and 11,600 levels.

India VIX fell 1.28 per cent to 24.22 level. However, it continues to sustain above the horizontal trend line on the daily scale, and thus, volatile swings may continue in the coming days.

Bank Nifty opened with marginal gains and started correcting right from the word go. The banking index witnessed a fall of more than 1,100 points from its opening price on the back of a sharp fall in the shares of HDFC Bank. The index underperformed the benchmark index and formed a bearish candle on the daily chart.

Currently, it is hovering near its rising trend line and 100 EMA on the weekly scale. At the current juncture, support for the index is placed in the 28,125 – 28,000 zone, while resistance can be seen around 29,000 and then 29,250 levels. Till the time Bank Nifty doesn’t crosses the 29,300 level, traders should trade with a negative bias and use intraday bounces as shorting opportunity.

Nifty futures closed negative at 11,247 level with a loss of 0.42 per cent. Long build-up was seen in Cipla, Dr Reddy’s Lab, PowerGrid, Pidilite Industries and Asian Paint, while there were shorts buildup on counters like Shriram Transport Finance, Motherson Sumi, PVR, Bajaj Finance and Eicher Motors.

(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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