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Nifty: F&O: India Vix hits 20.53, must cool down to 17 for consolidation

By Chandan Taparia


The Nifty50 index opened with a gap down amid weak global cues and hit an intraday low of 10,138 on Thursday. However, it recovered from the low point, but failed to clear the 10,335-10,350 zone and remained highly volatile throughout the session before settling just above 10,200.

The index has been forming lower top and lower bottom on the weekly scale and it now needs to negate the same with a decisive hold above 10,200 level, else the market could continue to see weakness. As long as Nifty holds below 10,350, it could slip towards the recent low of 10,138 and then 10,000, while on the upside, a hurdle is seen near the 10,350-10,400 zone.

On the options front, maximum Put open interest was at 10,000 followed by 10,500 while maximum Call OI was at 11,000 followed by 10,500. There was Call writing at 10,500 and 10,400 levels, while Put unwinding was seen from 10,300 to 10,500. The option band signified a broader trading band between 10,100 and 10,400.

India VIX moved up sharply by 14.73 per cent to 20.53. A spurt in VIX from Wednesday’s low suggested that the bears are not loosening their grip and every bounce is getting sold into. Now, VIX has to cool down below 17.50-17 zone for any sign of consolidation to emerge.

Bank Nifty opened with a gap down and erased most of its gains from Wednesday and drifted towards 24,500. It remained highly volatile throughout the session, but managed to hold above 24,500 with its supply zone at 25,000. As long as Nifty holds below 25,250, it can slip towards 24,500 and then 24,250 levels.

Nifty futures closed negative at 10,258 with a loss of 1.98 per cent. Longs were seen in BPCL, ZEEL, MRPL, HPCL and IndiGo while shorts were seen in KSCL, Bajaj Finance, Havells and SRF.

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




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